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Last Friday I went to a Westminster Media Forum event on the Future of Local Media. Claire Enders, the founder of media research company Enders Analysis, kicked things off with a thoroughly depressing analysis of the state of local media and here are my notes from her session.  (The Press Gazette also covered this talk under the headline: Urgent action needed to save newspapers)

Local radio

Local commercial radio has an unequal fight against BBC local radio: commercial radio spends £170 million per year on programming against the BBC's budget for local radio of £400 million.
  
In audience terms, there has been a steady drift from local radio to national radio, especially towards BBC Radio's 2 and 4.  

Advertising revenues peaked in 2003/04 and have been steadily declining since then.

In general there is an over-supply of commercial impacts - advertising volumes are exceeding demand, which obviously implies falling rates.

Claire predicts that local commercial radio will be pretty much extinct within the next five to ten years.

Local newspapers

The sector is declining, and the rate of decline is accelerating.  Income for local newspapers is heavily reliant on advertising which has been decimated in waves - first job ads, then property (and now retail).

BMRB figures show the time being spent with newspapers is declining even faster than newspaper's reach - especially amongst young people and most strongly amongst 20 to 24-year-olds.  So even where people are still buying a Sunday newspaper for example, they are allocating less time in their day to reading it.

What's left is a hard-core of elderly local newspaper readers who are also 'Internet rejectors' - households which are not online and which see no point in going online.  

The result is that ten to fifteen local newspapers are closing each week.  And Claire predicts that half of all jobs in local newspapers will be gone in five years.

Advertising market

Also looking forward five years, the Advertising Association predicts that 34% of advertising spend will go online by 2013.
  
But that does not mean that online is the answer for local media.  The value of a regular reader of a local newspaper, including direct and advertising revenues, is estimated at £91 per year.  But a regular visitor to a local newspaper website is generating just £3 per year.

So where are the advertising revenues going?  Some will have followed classified advertising online to sites like Monster, Autotrader, Gumtree and eBay.  But the biggest share is going to our old friend Google.  On Google, Claire made the interesting point that an algorithmic approach to content leads inevitably to monopoly, whilst a people-based approach encourages diversity.   

Whilst Google is in many ways a blessing, it cannot be said to have delivered much value in terms of employment.  According to Claire, on UK revenues of £1.2 billion, Google employs 10,000 people whereas the UK press, with total revenues of £2.4 billion employs a total of 175,000 people.  (Actually I'd be amazed if Google employs anything like 10,000 people in the UK - there may be 10,000 staff across the UK offices and the European headquarters in Dublin.)  

Can anything be done?

Claire Enders argues for a rapid removal of controls on the local media market, including cross-channel ownership restrictions which prevent the same company owning local newspapers and local radio stations.  

Meanwhile newspapers are too reliant on Google for traffic to negotiate fair commercial terms for the content that Google indexes - so perhaps there is a role for government here, via a Google windfall tax, to redress the balance.

As for local radio, it seems unfair to blame the BBC for the poor performance of their commercial rivals.  After all, very recently local radio stations were profitable - but the profits have not generally been re-invested in quality local programming.

One of the biggest problems with local media in general is not just that market dynamics have changed, but that they are changing incredibly fast.  If we aren't careful, the diversity of local media will be destroyed before politicians and the general public really realise what is going on.  By then writing a letter to the local newspaper or mouthing off on the local radio phone in will no longer be options.  And advertisers will have lost an incredibly powerful way to connect to a local audience.

No more cookies please

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I think that privacy and control will be big issues in digital marketing this year, so it's interesting to see that Google are now offering an explicity opt-out from cookies set either by Google or by their adserving network Doubleclick.  This button is very prominently displayed on Google's main page about Advertising and Privacy.

Google opt out









This is a really encouraging development.  Without services like this, consumers trying to protect their personal privacy are often forced to delete all their cookies - which will also remove saved settings on many websites, like login information.

Rooting around, it turns out that this service is being run on behalf of Google by the Network Advertising Initiative, which offers consumers a route to opt out of a whole host of advertising networks including Advertising.com, Yahoo and Atlas.

Of the 17 networks listed, I have active cookies from 9 (not that I am particularly obsessed with deleting cookies - working for a media agency, that would be a tad hypocritical of me!). 

The opt out page for the Network Advertising Initiative sits at http://networkadvertising.org/managing/opt_out.asp. 

Firefox Download Day

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Today is the launch day of Firefox 3 - which, confusingly for the UK, started at 6pm this evening to give the West Coast of the United States a chance to wake up.

To mark the day, Firefox is aiming to go into the Guinness Book of Records for the most software downloads in a day.  In fact, since the record doesn't currently exist, they shouldn't have too much problem in getting into the record books.
spread firefox

The Spread Firefox website - billed as the home of Firefox Community Marketing - is actually a fantastic example of social media in action.  The overall campaign is backed by links to blogs, events, an affiliate scheme, a photo stream, projects and discussion groups. 

A poll by the Marketing Society of leading UK marketers came out today, looking at attitudes to social media.  It's clear that most marketers in the survey have a pretty cautious, wait-and-see attitude to social media.  But it's also clear that most marketers associate social media mostly with blogging, either at an individual level or around corporate blogs aimed at journalists.

As Firefox shows, social media is much much more than that.  In fact social media is one powerful ingredient in a larger picture - social, or community marketing. 

Marketing Society Graph  

 

Ah, it's the Cannes Lions this week, so to celebrate I've spent my lunchtime flicking through the ad slots mentioned as contenders for the Grand Prix in Ad Age's preview.

No doubt the Cadbury's Gorilla will do pretty well in the awards, although I'm pretty bored with this now. 

But I did like two commercials that I haven't seen before...

Ogilvy (Toronto)'s work for Shreddies has a great idea brilliantly executed - it's well worth taking the time to look at the other work in this campaign - all equally funny!



And I totally agree with AdAge that BBDO New York's work on Monster is just breathtaking - a really gorgeous piece of work that I'm sure worked brilliantly.  To be fair, Monster has been doing nice work for quite some time (back in 1999 they were running a commercial featuring a bunch of kids talking about their ambitions: "When I grow up, I want to file all day.  When I grow up, I want to climb all the way up into middle management.  I want to be replaced on a whim."

But this latest campaign really is the boss!  (Don't bet against the bloody gorilla though!) 

Phew!

This is my chosen topic for a talk at Internet World this afternoon - what was I thinking!

Anyway, I'm going to turn my talk into a blog entry just to get my thoughts in order... here goes.

The starting point for this came from a piece of academic research I stumbled upon - it's a paper on 'Narrative Processing: Building Consumer Connections to Brands' by Jennifer Escalas at the University of Arizona.

To quote from the abstract:

"Narrative processing creates or enhances self-brand connections (SBC) because people generally interpret the meaning of their experiences by fitting them into a story. Similarly, in response to an ad that tells a story, narrative processing may create a link between a brand and the self when consumers attempt to map incoming narrative information onto stories in memory. Our approach rests on the notion that a brand becomes more meaningful the more closely it is linked to the self. We conceptualize this linkage at an aggregate level in terms of SBCs, that is, the extent to which consumers have incorporated the brand into their self-concepts. The results of an experiment show that narrative processing in response to a narratively structured ad is positively related to SBCs, which in turn have a positive relation with brand attitudes and behavioral intentions."

This feels pretty fair to me. When we engage with a story, we subconsciously put ourselves into the story: if the story involves a brand, we imagine ourselves engaging with the brand.

However - and here comes a pretty broad brush statement - whilst above the line advertising intuitively understands this, I wonder whether digital agencies really focus enough on narrative structures.

Here's a classic commercial for Hamlet cigars which I still find funny no matter how many times I've seen it. And yet it isn't just humour for humour's sake - the payoff is that Hamlet makes the frustrations of everyday life somehow a little more bearable.

 Set against this, an awful lot of digital advertising is really very utilitarian.

This banner for airport parking is actually not exceptionally bad - it's just representative of the kind of droning offer-based creative that we see online all the time.

Airport Parking banner

 OK, that isn't really a fair fight!  Of course there are some great examples of narratives appearing online.  For instance, the About Us page on the Innocent site tells the familiar story of how Innocent was founded:

"In the summer of 1998 when we had developed our first smoothie recipes but were still nervous about giving up our proper jobs, we bought £500 worth of fruit, turned it into smoothies and sold them from a stall at a little music festival in London. We put up a big sign saying 'Do you think we should give up our jobs to make these smoothies?' and put out a bin saying 'YES' and a bin saying 'NO' and asked people to put the empty bottle in the right bin. At the end of the weekend the 'YES' bin was full so we went in the next day and resigned."

Great stuff! 

Stories are particularly important online because we know that people have a myriad of ways to pass on good content to their friends: through blogs, email, social networking sites, user reviews, forums and chat.

So the viral impact of the web is one key factor.  Another is the amazing rise in broadband access speeds, which have on average trebled in the UK over the past two years.

That makes video content an increasingly important part of the mix.  But that doesn't mean that the web will become a channel for 30 second commercials.  In fact there are some fascinating new formats developing that could never have evolved in the more rigid environment of TV.

Take for example, the bizarre case of 'Cheddarvision' - a 24 hour live webcam pointed at, you've guessed it, a cheese.  Cheddarvision, which attracted 1.7 million viewers, has now helpfully compressed 9 months of video into a 60 second film on YouTube.

 

Even the dullest of marketing devices, the product demonstration, can work spectacularly well online, as the brilliant series of videos for Blendtec proves.

At time of writing, this particular film has had 2.7 million views on YouTube.

 

That's great, but I'm a bit worried by the fact that both these examples are coming from clients rather than agencies.  Of course, everyone can have a good idea, but the trouble is that when agencies get involved in this space, the results sometimes backfire spectacularly.

The Cillit Bang incident, where a PR agency writing as the brand spokesman Barry Scott added a comment to a blog written by Tom Coates is still rippling around the Internet.  This all happened two and a half years ago, and the Guardian wrote a story on it at the time: "Cleaner caught playing dirty on the net".  And all these months later, the Guardian story is still ranking on the first page of Google results for searches on the Cillit Bang brand - and the Wikipedia entry for Cillit Bang retells the story. 

I'm worried that many digital agencies are stuck into a direct response, results driven mentality and simply aren't thinking about creating strong narratives that will build brands.  I saw a presentation from a major online retailer where they described the steps in the life-stage strategy they followed as:

1) Relationship starts

2) Honeymoon period

3) Ongoing relationship

4) Frustration

5) Disillusionment

6) Abandonment

Of course, this describes a classic story arc, which makes me wonder whether email couldn't be used within part of a narrative structure.  Years ago, this was exactly the pretext of the interactive drama Online Caroline, where emails from the lead character knitted together short video episodes.

Online Caroline - which was created by XPT and bought by Freeserve - is the direct precursor of the fascinating soap operas being developed by Bebo.

These kicked off with Kate Modern - which was created by the team behind the YouTube hit lonelygirl15.

Gap Year is currently in development, and will be a fantastically ambitious project - especially since the characters are real people who will be filming themselves as they play within a loosely plotted narrative as they travel around the world. 

And my current favourite is Sofia's Diary (not that I'm especially the target audience!)  With its snappy 3 minute webisode format and integrated pre-roll advertising, I think that Bebo has really stumbled upon a format that will work incredibly well online.  It's well worth checking out an episode or two.

So where is this all going.  I think that stories and brands are natural bed-fellows and have been for a long time.  I think that digital can be an incredibly exciting environment to deliver stories and see their impact really multiply.  And sadly, I don't see agencies making a lot of the running here, as opposed to clients and media owners.

Who killed Kate Modern

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Over at Bebo, Kate Modern is now into its second series - and you've got to love the delightfully tasteless skin that they have come up with for the home page.

Kate was of course killed at the end of series one, so series two focuses on solving the mystery of her murder - no doubt there'll be some fantastic opportunities for product placement along the way.  1001 Carpet Cleaner perhaps?

katemodern2.jpg


bebo-logo.jpgToday's purchase of Bebo by AOL for $850m is bound to focus attention on Facebook's supposed $15bn valuation.

That puts a value on each Facebook user of around $300, whilst Bebo is only bringing in $20 per user.

Even allowing for the younger crowd on Bebo, the disparity does look pretty large.  Especially when you consider that Bebo has been behind a lot of really interesting innovation in the space, like Open Media, Kate Modern and the imminent Endemol tie-in, Gap Year

The $15bn valuation of Facebook is based largely on Microsoft's purchase last year of 1.6% of Facebook for $240m.  But that deal was a lot about ensuring that Microsoft could broke ad-space on Facebook - and of course, that it could keep Google out of the party.

There's was a brilliantly cynical comment on the Fake Steve Jobs blog last year, which perhaps held a germ of truth:

Picture this: Zuckerberg's got a big fish on the line for real money at a $15 Bill valuation. But is having trouble landing it. So he calls up his buddy at MS (formerly of Groove Networks) and his other contacts from working with MS so far on selling ads. They work out a deal where they get to say publicly that MS has dropped $240 Mill for 1.6%. What isn't so public is that a lot of it works out to funny-money; MS product, MS services contracts, consulting fees, etc. And a good deal of the real cash MS looks to get back with side contracts for future purchases from MS. So the real money spent is much smaller but Facebook still gets real investment because MS is just a ringer in the crowd to suck in the real marks. And MS gets their hedge on Facebook at a discount by trading on their name. Plus MS gets sales to Facebook on the books to add a little juice to their earnings number. 

Anyway, good luck to AOL. Whilst all the attention seems to be on the Microsoft-Yahoo bid, AOL seem to be making some smart buys recently.

Initiative beats off two...

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Genius bit of sub-editing at Marketing Week which has brightened my day no end!

Even the photo caption is rich in innuendo.  Or is this just my grubby mind?

Initiative_gossard


There's a lovely paragraph in the Guardian summing up the not-so-warm relationship between Terry Wogan and Chris Moyles, the breakfast DJs on the UK's top two radio stations Radio 1 and Radio 2.

"The pair's rivalry is not always friendly: Wogan once described Moyles as "in doubtful taste"; the Radio 1 DJ responded by saying he would "tear that wig off his head and shove it up his arse"."

Both breakfast shows have dropped about a quarter of a million listeners, but Wogan is losing ground slower than Moyles, giving his twinkly charms a lead of around 700,000.