Editor's View

Full circle

Platform: Internet | Author: Justin Pearse | Source: nma.co.uk | Published: 08.05.08

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It wasn't so long ago that a two-screen view of 'interactive TV' was all the rage. Rather than the red button interactivity we all grew to love and then rapidly abandoned when its functional shortcomings were thrown into such stark relief, two-screen meant a combination of TV and PC.

As most seems things to do in the digital...

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... world, we've come full circle. An innovation that failed due to the lack of supporting technology and consumer behaviour foundations is finding its feet.

With the mainstream penetration of Wi-Fi connected laptops, vegging out in front of the TV has become slightly more active as people take to their surfboards. In NMA this week research from the IAB and Thinkbox finds 64% of people use the internet while watching TV. While we discuss in this Friday's NMA Podcast, what this means for brands, the rebirth of two-screen should also have a potentially positive impact for broadcasters.

While red button interactivity on programmes has all but disappeared, with the undeniably superb Spooks the only real standout in the interactive category of the recent Baftas for instance, the use of two-screen interactivity should open new creative vistas for broadcasters and production companies. Twin-screen behaviour is now the norm for consumers. It's time for it to become so for the TV industry.

-- Justin Pearse

Mixed messages - 04.04.08

Parents around the world breathed a sigh of relief today as paedophiles were finally banned from MySpace and its social networking cousins. Days after government-funded watchdog Ofcom terrified parents with its report on their children roaming unprotected across social network sites, the Home Office today stepped in to reassure with its watertight new policy. The proposals will see convicted sex offender's email addresses passed to social sites, which will block their access.

Well that's okay then. Except, of course, it's far from okay.

Sex offenders have become incredibly adept at using the internet. The complexity and expense, and therefore success, of Operation Ore, is testament to that. Does anyone really believe registering a new email address will be beyond them?

It's easy to knock the government's approach to the internet but the mixed messages being given out are doing nothing but harm.

The mainstream media, from which the majority of the UK is educated about the internet, this morning unquestioningly regurgitated the Home Office release verbatim, under headlines such as 'MySpace ban for paedophiles'. What parents need, in fact what the government itself recommended via the Byron Review this week, is to be provided with the right information and tools to be able to protect their children while online.

Our first industry survey, in association with YouGovCentaur, the first results of which were published in NMA this week, found only 33% believing the government's strategy for child-friendly online content was clear. On recent evidence, I can't see this changing dramatically anytime soon.

-- Justin Pearse

Talk isn't cheap - 27.03.08

It would be a great pity if, as well as playing a role in denting Tesco's share price this week, Simon Uwins also dented companies' enthusiasm for corporate blogging.

Uwins, you will recall, is head of marketing for Tesco in the US, and he has been blogging, among other things, about the retailer's foray Stateside with its Fresh & Easy convenience stores.

He happened to mention last week that the retailer was calling a three-month halt to its opening programme. It took the markets a few days to pick up on it, but when they did, Tesco's share price dropped. From now on, market analysts will be paying more attention to blogs, but it will be a real shame if as a result, executives also lose their enthusiasm for blogging.

After all, some companies, particularly in the tech sector, use blogging as an established part of their corporate communications. Google zealously guards the inner workings of its algorithm, but permits Matt Cutts to drip-feed the search sector with valuable insights into how the search giant is thinking. The interesting part is Cutts still sounds like an engineer, so whatever checks and balances Google employs haven't drained all life - and interest - out of his blog.

Tesco's share price will recover, no doubt, and hopefully Uwins' personal stock will also bounce back. But the problem remains: everyone keeps on at companies to be authentic in their digital communications, but on corporate blogs it seems, honesty isn't always the best policy.

-- Nic Howell

Online childcare - 27.03.08

Today the long awaited, well long expected anyway, Byron Review into child safety online was revealed. Unsurprisingly, the buzz words of kids, online and danger ensured widespread coverage and a loud welcome from everyone from charities to Google. But, really, is there anything more in this than the repackaged beliefs and recommendations our industry has been expressing for years?

There is almost nothing in the report that's not already widely being practiced by the industry. The online industry holds the safety of children as paramount. All major websites have solid and largely effective child safety polices. ISPs do already heavily promote parental access control software the report calls on them to do, often giving it away for free.

The report calls for the ad industry to work with online media owners on the CAP Code for under 18s. It's hard to see, with the efforts of such as the Advertising Association's Digital Media Group, how the industry could be doing more.

There is of course no argument that more can always be done to ensure children's safety online. But the Byron review smacks merely as just another example of this government's headline-grabbing approach to the internet.

In an exclusive survey of the internet industry carried out by NMA in association with YouGov, to be published in two weeks, only 18% expressed confidence in the government's ability to legislate around children online.

Which makes me think perhaps Brown's government should rely a bit less on celebrity psychologists and a bit more on consultation with the actual industry. With perhaps a dash more congratulation on the impressive amount it has already achieved.

-- Justin Pearse

Right on the money - 13.03.08

Well what do you know? In this week's NMA (13.03.08) we ran a feature looking at the future of online ad networks. Our belief is that as Google and Microsoft build ad platforms that combine reach with segmentation, networks are going to get squeezed very hard.

In the article, Diffiniti MD Rob Horler said it wouldn't take a big leap of faith to say that most big advertisers and their agencies would be getting "bog-standard" ad serving for free in the not-too-distant future. And lo, this morning, the Wall Street Journal broke the news that Google is launching free ad serving with its Ad Manager.

The timing of this couldn't be sweeter, coming so soon after the EU waved through Google's acquisition of DoubleClick. It shows just how serious Eric Schmidt's team is about taking the food from Steve Ballmer's mouth. Google says that Ad Manager will be aimed at the long-tail SME market, a bit like its Google Analytics, but it obviously has the potential to have a wider impact. As one satisfied publisher says on the Ad Manager site: "Ad Manager has already reached a level of competency that rivals the expensive service providers".

Ad serving is going from commodity to free. Google says it has no plans to stop charging for DoubleClick ad serving, but it's now perfectly possible to see a day when this is bundled into big ad deals for nothing. Your move, Microsoft.

-- Nic Howell

Challenging preconceptions - 28.02.08

It was fun to listen to the Future of Advertising session at this week’s FT Digital Media conference. In some ways the panel looked liked they’d beamed in from another planet - seasoned agency types in a room full of money men, consultants and geeks.

M&C Saatchi chairman Moray MacLennan did his best to be provocative. He questioned cherished notions, such as the fact that consumers want to engage with every brand. And as you’d expect, he delivered his message in classic Saatchi style: visually arresting, succinct and non-PC. To show how the ad industry had to adapt he put up an image of Mrs Thatcher with a green mohican.

MacLennan’s point was that the industry had to combine the best of what it knew about branding with a willingness to break the rules. Then in the Q&A he made the impish assertion that “search is not marketing”.

“When you’re putting money into search you’re taking it out of marketing,” he said. “All you’re doing is buying a space on the internet high street. You’re commoditising your brand.”

So for MacLennan, the activity that represents the majority of online spend in the UK is merely “distribution”. His comment was a deliberate fart in the middle of a digital gathering and controversial for an IPA president, considering the trade body established a search group earlier this year (NMA 24.01.08).

Perhaps MacLennan - who makes no secret of his scepticism about digital hype - was trying to bait the industry. But beneath the soundbite, he’s right to be provocative.

Back in 2005, Google began a presentation that ended with a casual announcement about ending agency commission by showing the inexorable decline in mass TV audiences. The message was: TV can’t deliver the eyeballs any more, so search is the answer. Thankfully, the search giant has moved on, now trumpeting how it’s working with ‘traditional’ ad agencies. Even Google has worked out that search isn’t the answer by itself - you need other channels doing the work of putting the brand in people’s heads in the first place.

MacLennan isn’t anti-search - indeed, he also said he wished he’d got into the industry as it was taking off. But he’s absolutely right to question lazy perceptions around it. The faintly pejorative reference to distribution is questionable - if successful marketing is about managing demand, it surely must include an effective distribution strategy. I believe that if you’re spending on any kind of branding or PR, search visibility is crucial. But to see search as the be all and end all, or something that removes the need for other forms of marketing, is both limiting and dangerous.

-- Nic Howell

What's the big idea? - 14.02.08

Seen any great digital media ideas recently? I ask because on Tuesday night I joined Scott Gallacher from Sky and Greg Marsh from Index Ventures on the judges panel for the IAB's Digital Innovators event at the RSA in central London.

Eight businesses had to pitch to us ideas that in some way promised some kind of innovation in digital media. The businesses had five minutes each - nerve-wrackingly enforced with an air horn. The judges had the job of grilling the presenters and the audience had the job of voting for a favourite.

It was undeniable fun giving in to my inner Simon Cowell. But the event also raised some questions.

First, the winning idea was pitched at the start of the evening while the runner-up was pitched at the end. Such gap-toothed results could be as much a comment on human attention spans as on the strength of the actual ideas on show.

More fundamentally, I think the reason the voting clustered some saliently around only two ideas was that, despite some polished - and undoubtedly brave - presentations, there simply wasn't much innovation on offer.

Indeed, a lot of ideas seemed to be ways of badging a consultancy service or back-office tools. They were techniques for harnessing communities, or understanding social media, or validating and managing customer records.

While up-to-the-minute, these ideas seemed to me to operate within the game rather than trying to change it.

But if a truly original step-change innovation had been presented, would we have spotted it? Put another way, as I whispered to one of my fellow judges, if Google had been pitching to us ten years ago, would it have won our vote?

True innovation is hard to do, hard to assess and hard to commercialise. That doesn't mean it's not worth doing. Just that there's not very much around.

-- Nic Howell

Recession threatens online content - 25.01.08

There's two big topics of conversation around at the moment, but it wasn't until after I saw Steal This Film II last week that I linked the two together.

The first is the knee-jerk insistence that, in the future, all digital content is going to be paid for by advertising. The second is the likelihood of a world recession.

If advertising is going to play a bigger role in funding content in the future, then that means the competition for advertising spend is automatically going to get tougher. Brands are suddenly going to find far more options for their ad budgets. But if content producers are relying increasingly on advertising to fund their operations, what happens when there's a recession and ad budgets are slashed?

The conventional wisdom is that, when ad budgets are cut, it's the direct channels that can show measurable returns that survive the best. Conventional online advertising (to coin a phrase) has certainly benefited from this in the past, and looks likely to do so again. But what happens to a band if, as new EMI boss Guy Hands has suggested, their new album is due to be sponsored? How measurable is the return from that?

In fact, musicians are probably in a better position than most content creators, since they have another revenue stream from live performance. Film-makers, on the other hand, should probably be rather more concerned.

-- Michael Nutley

Share and share alike - 23.01.08

Last Friday I went to the London premier of Steal This Film II, an independently-made documentary about the impact of file sharing on the content industries.

The film does a good job of outlining the history of file sharing, and explaining the technical reasons why it's impossible to stop. It also celebrates pirate culture in the form of the UK grime scene. What it doesn't do, but what the audience of media types was clearly most interested in, is look at how content creators are paid in a world of free content.

There were some interesting discussions afterwards, with people talking about music being free but musicians being paid through live performance and merchandising. Nick Watt from Citizensound raised the idea that music might be paid for by a levy on ISPs similar to that paid by radio stations for playing recorded music. And of course several people talked about advertising - the utter failure of ad-funded music services to get off the ground notwithstanding.

The two ironies of the evening were that no-one paid to attend, since the event was sponsored by web agency Lateral and production company Red Planet, and at the end the film-makers ask for donations, rather than investment, towards their next project.

-- Michael Nutley

Rights issues cloud launch of BBC iPlayer - 09.01.08

The BBC's iPlayer has been universally applauded by consumers and critics alike. The ability of being able to catch up on the past seven days programming for free hasbeen enthusiastically taken up by viewers and its success could, as always with the BBC, play an important role in riving the market.

However, an anomaly that's arisen today highlights the remaining complexity of catch-up video-on-demand services. A complexity driven entirely by the tortuous rights processes involved.

The BBC's new legal drama Damages launched on BBC 1 on Sunday and was available through iPlayer. From Monday however, it disappeared. Viewers desperate to catch the episode they missed would though have been able to find it on Apple's iTunes. Although the first episode is free, future episodes will sell for £1.89. So it seems the BBC was unable to secure rights for iPlayer, with Sony Pictures, which owns the series, which struck a commercial deal with Apple instead.

BBC viewers currently being simultaneously bombarded with ads for free seven day catchup on iPlayer and ads for shiny new Sunday night drama Damages are going to be very confused.

If the BBC, which has for so long trumpeted the need and importance of 360 degree commissioning, can't pull it off, it's not the most heartening of news for the industry at large.

-- Justin Pearse

Tighten up online security - 03.01.08

Two of last year's biggest internet story themes surrounded social networks and online identity theft. Today the BBC is reporting predictions from security experts that the two will combine this year in explosive fashion as internet criminals turn to social networks like Facebook as a fertile hunting ground.

This unsurprising prediction highlights two separate arguments. First, it seems to support the idea behind Facebook's Mark Zuckerberg's lofty ambition for Facebook to become the 'social operating system of the internet'. Why trawl the wider web for personal information when consumers are increasingly centring their personal social behaviour on these sites?

Second, the news highlights once again the critical role self-regulation, responsibility and education has to play in the development of social networks. With privacy and personal data protection set to become an increasingly emotive issue in 2008, social networks need to ensure they take a continuingly proactive rather than reactive stance. Government, regulators and perhaps most importantly consumers will be watching closely.

-- Justin Pearse

Rules of attraction - 21.11.07

The most interesting idea from yesterday's Library House Essential Mediatech event was raised by keynote speaker Reid Hoffman of LinkedIn nd eiterated by Library House chairman Doug Richard. It was a return to the 'build it and they will come' philosophy of the dotcom bubble, but with a twist. These days you don'tIPO on the basis of your traffic and a vague plan to monetise it, you sell the whole thing to someone else and let them orry about how to make money. Or as Richards put it, you don't sell a business, you sell an audience. That's new.

A couple of weeks ago at the Ad:Tech show in New York, the same idea was floated, but with a more cynical cast. Jason Hirschhorn, president of Sling Media Entertainment Group, suggested that a new start-up in the social space might not want to carry ads, since that would affect the user. Better to avoid any thought of monetisation and boost your visitor numbers and therefore your sale price. So what if you risk delivering a fake experience to users, resulting in their inevitable disappointment when the new owner tries to make money out of the fashionable media property they've just acquired.

-- Michael Nutley

Ad funding doesn't mean ad watching - 18.10.07

In the search for online revenue models, ad funding seems to be emerging as the winner.

Recently we’ve seen the New York Times abandon its subscription services and the FT formalise a hybrid of ads and subscription. Even the Wall Street Journal is said to be reconsidering its position on subscriptions.

Likewise, the moves by Radiohead and Madonna to ditch traditional relationships with record companies are being seen by experts as a stepping stone towards a future where music is available free to download, supported by ads.

But amid all the talk about consumers accepting advertising, about them understanding that it’s how content is paid for, let’s not lose sight of the fact that they don’t feel any obligation to actually watch the stuff.

In fact, I’d suggest that one of the reasons why people are happy with ad-funded content is because they know they can ignore or avoid the ads if they so choose. Hence the FT’s desire to improve the targeting of its ads through registration.

-- Michael Nutley

Keeping up with demand - 20.09.07

I've just finished writing the introduction for this year's Top 100 Interactive Agencies guide (it's published next week). One of the things that came out of my conversations researching it was the growing demand among clients to use digital applications for marketing. As MRM Worldwide CEO Alastair Duncan said, "the desktop is seen as a legitimate place for marketing". Certainly that fits with ideas of non-interruptive pull marketing, advertising-as-service and constant communication with customers.

But at Ogilvy's Verge event last week one of the speakers was Michael Tchao, general manager of Nike Techlab, the bit of Nike behind Nike+. And he made a very interesting point; once you've given people a service as part of your marketing effort, how do you move on and do something new? It's very difficult to take something popular and successful away from people, so you're left with the prospect of having to continue to support all these services or risk alienating your customers.

-- Michael Nutley

Tony Wilson - 13.08.07

Tony Wilson died last week. Unsurprisingly, the coverage has concentrated on his achievements in the music business and his commitment to Manchester. So I wanted to mention here another of Tony's passions: new media.

I first met Tony at Manchester Digital's Big Chip awards in 2004, where he was the compere. Introducing the awards, he pointed out that the computer had been invented in Manchester and praised the award winners for reclaiming and building on that tradition.

He was in the process of organising Interactive City, an event intended to do for the digital industry what his In The City had done for the music business: create a nationally (and internationally) significant event outside London. NMA became media partner for Interactive City, which was held in Liverpool. It wasn't a huge success in terms of attendance, at least in part because in 2004 the industry wasn't really ready for it, although everyone I know those who went found it hugely enjoyable and stimulating.

Tony's enthusiasm for new technology seemed to mirror his enthusiasm for music. It was both a passion on its own and a vehicle for his vision of a reborn Manchester. His impact on the musical and cultural life of his home city can't be overstated, but his importance to its digital industry, both as an inspiration and a supporter, shouldn't be underestimated.

-- Michael Nutley

Unfinished business - 08.08.07

At the suggestion of Dare's creative director Flo Heiss, I've been re-reading Brian Eno's A Year With Swollen Appendices. It's packed with thought-provokng stuff, but the thing that's really been nagging at me is his idea that interactive is the wrong word for what we all talk about in the digital sector. Culture, he says, is by definition interactive. Instead, Eno proposes the word unfinished, suggesting that what we're doing when we create interactive experiences is actually creating something for someone else to finish.

Talking to Adriana Lukas of The Big Blog Company about this last night, I realised that, seen from this perspective, big media becomes an anomaly. The idea of "unfinished" describes the folk process that dominated culture in pre-industrial times just as well as it describes the current era. It was expected that content, for example songs or stories, would be modified by each person who came across it as they passed it on. When mass media arose in the industrial age, what happened was that a few people dominated the transmission of information. The return path was broken and copyright laws came into effect to protect a single version of each piece of content.

What's happened in the past decade is that the connections that allow individuals to distribute content have been re-established at the same time as the tools for reworking content have come within the reach of the mass of the population. After all, what's a remix if not a 21st century version of the folk process in action?

-- Michael Nutley

A new era of multi-tasking - 19.07.07

I went to the Mashup TV 2.0 event last night, and came away with my head buzzing from so many conflicting views. But there were two ideas that really stuck in my mind on the way home.

The first was something one of the panellists, Peter Miles of student interactive TV channel SUBtv said about young people avoiding ads. I'd always thought about this in terms of interactive technology giving people the tools to avoid ads. But Peter's point was that, particularly among young people, it actually goes much deeper than that. The observation that young people can multi-task when consuming media is commonplace, it even has it's own name: continuous partial attention. But what Peter suggested was that this means youngsters are spectacularly able to ignore ads just by turning their attention elsewhere when one appears. So even if you think you're interruptive message isn't being blocked or skipped by that audience, the chances that it's actually being watched are close to zero.

The other thought came from the same discussion; what are people doing while they're watching TV? Back in the early days of interactive TV, the US in particular pursued what was called a two-screen model, where the interactivity came via a PC in the same room as the TV. This model never really caught on, probably because few people had PCs in their living rooms, and single-screen red button interactivity became the dominant approach, especially in the UK. But now laptops are virtually a commodity; PC World is this week advertising free laptops if you sign up for Orange broadband for two years. So are we seeing an ad hoc return to the two-screen model, and is there a useful interim stage here for experimentation before the mass adoption of media centre PCs in the home?

-- Michael Nutley

Wrestling for control - 28.06.07

Great line from blogger and writer Russell Davis at the Online Marketing show yesterday. He was on a panel about recommendation, and he was criticising someone at an earlier session (probably me) for talking about consumers taking control of marketing.

"People aren't taking control of marketing," he said. "They're just saying that they can't be arsed with it."

Which is as neat a summation as you could ask for, really, and not contradicted by the fact that people still clearly want greater engagement with certain providers of products and services, as Helene Venge's great Lego Factory keynote later in the day proved. What was particularly interesting was when she admitted Lego Factory (which allows you to design your own model online, then buy the brick set needed to build it in real life, and allows other to buy it) is an expensive way of selling bricks, but builds loyalty like nothing else they've done.

This turned out to be one of the key threads of the event for me; the rise of online apps that add value to the product and therefore become part of the marketing. So stuff like Nike+, Sky+.

In fact, in answer to a question about who would lead the way in the new world of customer engagement, Russell shrugged off the idea that it would be digital agencies, and suggested it would be interaction designers.

-- Michael Nutley

Social sites shouldn't just be for cool brands - 27.06.07

One of the interesting questions for me about social networks is whether there are certain brands that are excluded from advertising on them because they're not cool or interesting enough.

But I've just come out of the Marketing 2.0 session at the Online Marketing show, where Jon Bains of Lateral made me realise that I'd been thinking about things too narrowly. Bains' argument was that although certain brands aren't compelling enough to advertise on social networks, other aspects of the Web 2.0 toolset are hugely important.

His example was insurance brands, which are never going to get people flocking to be their friends on MySpace, but which can and should be using forums, blogs and so on to address questions and complaints about their customer service issues. And one of the other panelists, Nick Corston of Agency.com, said he believed that there are no brands that shouldn't be investigating in social media.

In fact one of the key messages from the panel is that there is no "one size fits all" and that one of the key challenges for brands is to make sure they strike the right balance of media.

-- Michael Nutley

Quite by chance - 22.06.07

How many of us are making it harder for ourselves to benefit from happy accidents?

The notion of serendipity seems to be cropping up a lot in my life at the moment (but then I suppose it would). At the b.TWEEN conference in Bradford last week, the two keynote speakers (Angel Gambino and MT Rainey) stressed the importance of serendipity, both in business and in life.

But only a couple of days before I'd been talking to some bloggers who acknowledged that their media consumption was now so tailored by keywords and RSS feeds that they rarely, if ever, came across anything that they weren't directly interested in.

Now you could say well, they're bloggers, they're early adopters, and therefore not typical of the population. But as the amount of content available to us proliferates and we struggle to keep up, how many of us are making it harder for ourselves to benefit from happy accidents, either through technological filtering or simple 'I don't have time'? And what are the potential costs?

-- Michael Nutley

Trying for an emotional response - 20.03.07

Last week I went to the IDM annual lecture, to hear Kevin Roberts, worldwide CEO of Saatchi & Saatchi. It was a bravura performance that started from the twin premises that consumers are now in charge and that they don't want to be marketed to, and moved on through the change from the information economy to the engagement economy, and ended up with Lovemarks, Saatchi & Saatchi's response to the fact that brands have become commodified (lovemarks.com).

But what I found most interesting was the fact that, although what Roberts was saying was familiar from all kinds of digital evangelists, he wasn't talking about digital media. In fact most of the examples he showed were 30-second TV spots, along with one website. Now that was at least partly due to the fact he was addressing a DM audience, so I went up to him afterwards and asked about digital. His response? That digital media is still too obsessed with information and as a result isn't reaching people emotionally. He highlighted a lack of planning and described new media creatives as tending to be inexperienced and naive. But he also said it's only a matter of time.

-- Michael Nutley

Persecuting the converted - 14.03.07

What's this obsession companies have with demonising their customers? Every time I watch a DVD of 'House' - which I paid full price for - I have to sit through an ad telling me not to pirate DVDs. Every CD I buy tells me not to pirate music. I go to the cinema to see 'Hot Fuzz' and I get a stern warning about not videoing the film off the screen.

And then today I get a press release from Transport for London about its latest anti-fare-evasion campaign, which apparently includes an email being sent to all Oyster cardholders telling them fare dodging is a crime.

I would have thought anyone who has bought and registered an Oyster card is a pretty low risk for fare evasion; they've already bought into the idea of paying their fare. I'm guessing the only reason that TfL is emailing these people is because theirs are the only names it has - just as entertainment companies see their products as an easy way of getting the message across, without thinking that the people who do the pirating won't give a monkeys, or of the resentment it'll cause among paying customers who they're talking to as if they're potential pirates.

The end result, of course, is that sympathy for these companies is diminished at exactly the time they most need the public on their side. And it's no way to build any kind of brand loyalty.

-- Michael Nutley

Against Web 2.0 - 07.02.07

These days you can't move for people talking about Web 2.0. But I can't help feeling that the whole craze is doing more harm than good.

That's not to disagree with the fundamental idea behind it, which was to codify the elements that had contributed to the success of various web businesses. Even then you could argue that the use of the numbering scheme employed for software releases is misleading. It isn't a new version of the Web; it's just best practice up to now. It also bugs me that it leads to glib one louder-isms; watch out for Web 3.0 coming soon.

But my real concern is that all the hype around Web 2.0 is encouraging people to think that by sprinkling a little Web 2.0 pixie dust over their site or their business, they can solve their problems or get a jump on the opposition.

I had an experience of this at a Web 2.0 conference I spoke at in the autumn. A hotel marketer asked me how he could apply Web 2.0 ideas to his business. I suggested he could start by including user reviews on his site. He told me they'd tried that, and some people had posted negative comments, so he wanted to use Web 2.0.

This 'next big thing' attitude crops up a lot in conversations with my agency contacts. They're worried that in chasing the latest innovations, companies lose sight of the basics of online business.

I also wonder if the emphasis on Web 2.0 approaches is likely to make companies less, rather than more, innovative. In a world where Web 2.0 is the panacea, will someone who comes up with a different approach get the hearing they perhaps deserve?

-- Michael Nutley

Spreading the word - 15.12.06

I went along to Mashup's Advertising 2.0 event this week partly because it sounded interesting, partly because it was being moderated by Rights Marketing Company founder (and NMA columnist) Michael Bayler, but mainly because Esther Dyson was on the panel.

Now I'm a big William Gibson fan, and when I read Pattern Recognition I was struck by the idea that these days more creativity goes into the marketing of things than into the creation of the things themselves. But something Dyson said made me realise it's no longer true.

She said that if she was starting an advertising agency now, she'd hire PR people, because what matters now is word of mouth. But to get good word of mouth, as admen have known since the dawn of the industry, you need a good product in the first place.

-- Michael Nutley

Moving onto the small screen - 01.12.06

I was talking to Carat MD Neil Jones the other day about the changing way media is consumed. He was telling me about kids watching movies on their iPods, which to anyone who grew up being taken by their parents to see films at proper, big screen cinemas, seems totally wrong. It's also something Apple rejected as a possibility when it launched its video download service through iTunes.

But then I remembered something I'd read recently in the FT Magazine (The Guess Men 11.11.06). In a piece by film critic Nigel Andrews about the future of Hollywood, he analyses some of the reasons behind the runaway success of 'Pirates Of The Caribbean 2', at $1bn (£500m) close to becoming the highest-earning movie in history.

One of the reasons he gives is that the film has "no concern with cogent storytelling, and neither do today's youngsters." Instead, he says, fiction is like a video game, "the only narrative is the need to get to the next level".

And while this might horrify the devotees of the classic three-act structure beloved by those who teach scriptwriting, it's perfect if you want to snack on a movie, watching it in bite-sized chunks.

So while I doubt the writers on 'Pirates 2' had the video iPod in mind when they were working on the script, they might just have come across exactly the right format at the right time, while the special effects satisfy the multiplex crowd. The big screen just got a lot smaller.

-- Michael Nutley

Virtual shopper - 13.10.06

I was reading Susanne Goller's Analyst Speak column in this week's issue (NMA 12.10.06), and thinking about her suggestions for retailers to make online shopping more like the offline experience.

One of the things she mentions is the use of virtual fitting rooms "which allow shoppers to create outfits by dragging and dropping items onto a digital mannequin, to add value and encourage customers to return".

The problem is that's not how offline shopping works. You don't buy everything from the same store.

Then this morning I was reading our interview with Second Life founder Philip Rosedale, which appears in next week's issue, and it hit me. What's required is for etailers to sign up to a standard virtual fitting room, which would allow shoppers to buy clothes from one shop before taking them to the next and buying something else that matches. And the easy way of doing this would be by creating it in an environment like Second Life.

Also in the interview, Rosedale talks about the way brands are starting to use Second Life to test new ideas. So the opportunity also exists for etailers and clothes manufacturers to let consumers do R&D for them, creating custom garments either to inform next season's lines, or event to be made to order.

-- Michael Nutley

No need for the specialists - 01.09.06

Digital planner and industry veteran Lazar Dzamic comes up with a great analogy in his Opinion piece in this week's NMA. He's talking about the likelihood of DM agencies winning more digital work, and his key argument is that the digital space is so all-encompassing that the distinctions on which the interactive marketing space is built are losing their meaning. The analogy he uses is that of the first radio and TV studios, which were run by technicians in lab coats.

This irresistibly reminds me of all those stories about The Beatles and George Martin changing the nature of recorded music at Abbey Road, with lab-coated EMI engineers all the while telling them what they couldn't do.

Digital agencies would all like to think they're John and Paul in that scenario, but with the creativity of digital advertising still being questioned, you've got to wonder how many are actually still wearing the lab coats.

-- Michael Nutley

Performance takes precedence - 30.08.06

A couple of years ago I wrote a piece suggesting that The Rolling Stones were the perfect post-Napster band. They still made records, but these had long since ceased to be the prime money-making focus of the group, which had shifted to tours and the associated sales of merchandise.

As a result, I doubt the Stones are much bothered how many of their tracks are illegally downloaded, although I'm sure they'd never admit as much. They can adopt the suggestion made by Lord Puttnam in NMA earlier this year and simply treat the illegal downloads as part of the cost of marketing for their next tour.

What I wasn't aware of was the extent of this shift across the music industry. A feature in The Independent last Friday outlined a world where recorded music is increasingly free at point of delivery, through advertising, cover-mounts, in-store and all forms of radio. Reports this week that legal download service SpiralFrog had signed a deal with Universal Music Group to make tracks from its catalogue available for free just seemed to nudge this world closer.

But the flipside, as The Indy points out, is that as recorded music becomes ubiquitous, live performance is becoming a highly valued musical experience. Ticket prices for the Stones last week topped out at £150, while Madonna was charging £160 for the best seats. Recorded music is a commodity, but the live experience can't be commoditised, because what matters is that 'I was there' factor.

Seen like that it's all the more surprising that more record companies aren't trying to get into the business of live music promotion. Certainly EMI's deal with Robbie Williams a couple of years ago, which involved performance as well as recording rights, is looking particularly prescient.

-- Michael Nutley

Moving with the times - 17.07.06

My immediate response to last week's announcement that Yahoo! and MSN were beta-testing interoperability between their respective instant messaging services was to wonder why it had taken them so long. After all, the principle of walled gardens has been abandoned in all other forms of communication.

The result of the merger will be a global IM community of "approaching 350m accounts" according to the statement, which for one portal that has been re-inventing itself as a media company for some time, and for another that is just starting down that road, is a pretty compelling audience.

But a couple of weeks back in NMA we ran a feature about social networking, which included some interviews with teenage MySpace users (nma.co.uk/socialnetworking). Among other things, these included the revelation that some teens are using social networking sites to communicate with each other, more so than email or even instant messaging. This in turn reminded me of the findings of some O2 research we published a few months back (nma.co.uk/cathkeers) where 56% of people questioned blamed falling brand loyalty on new things coming on to the market that people wanted to try.

It made for an interesting reminder that despite our tendency to assume stability, most of what we see around us in the digital world is transient, far more so than in the old media world.

-- Michael Nutley

Surround sound - 29.06.06

The idea that children can use multiple media channels simultaneously has become a centrepiece of almost every new media conference platform. It's a staple of every presentation, usually delivered with wide-eyed amazement. Talking around the subject with Matt Colebourne, CEO of social networking site Lunarstorm, last week however, I wondered if it might be wrong.

It seems to me that rather than using multiple channels - IM, email, TV, and son on - simultaneously, what's happening is that kids are using one channel at a time, but monitoring all the others so that they can switch attention when something occurs to which they want to respond. It's something our columnist Doug Richards touches on in next week's issue.

The reason I think this distinction is important is that, if it's true, it's something adults also do all the time. If you're at a party, for example, you're listening to the person you're talking to, but you're also aware of conversations going on around you, and can switch attention if you hear something interesting. In other words, it's not a "kids can do this and we can't" phenomenon, it's just that kids are applying that ability in a different way.

-- Michael Nutley

Piracy or marketing? - 19.06.06

Last month I was lucky enough to interview Lord David Puttnam (NMA 25.05.06 or nma.co.uk/LordPuttnam subscription required). One of the things we discussed was the way the film industry has responded to the threat of online piracy, and Lord Puttnam explained his view that piracy should be treated as a cost of sale, as the price of building a market.

It's a view I'm sympathetic to. Back in the days of the music industry's "Home Taping Is Killing Music" campaign, it appeared that the people with the biggest collections of home-recorded cassettes were almost always also the people with the biggest record collections. At least part of the money lost to such "piracy" could be regarded as marketing spend, since it allowed people to hear new music by artists whose records they would then go out and buy.

Within that argument, however, is the question of how high a cost of sale you're prepared to accept. In today's Financial Times there's a report that most Chinese film executives believe movie piracy accounts for 90% of the market in China (www.ft.com). At that point I guess you have to accept the cost outweighs the benefit, even in a market the size of China, and look at alternative business models.

-- Michael Nutley

The rise of branded blogs - 08.06.06

One of the biggest areas of controversy around social networking sites at the moment is to what extent they can be monetised. I spoke on a panel session at the Blogging And Social Media conference last month with blog-builder Ben Hammersley, and he summed up the old-school Webhead view, saying that as soon as brands started to get involved with these communities, the people who made them up would vote with their feet and decamp to another social site that wasn't tainted by branding.

The exact opposite view was put forward this morning in the keynote speech at the Online Marketing Show by Jamie Kantrowitz, SVP marketing and content, Europe at MySpace. She said "People use what they find in the culture to create an identity for themselves, and that's reflected in MySpace". Brands are part of the culture and, even in this post-No Logo age, part of how people define their identity involves brands. According to Kantrowitz, MySpace currently has 60 branded communities being run out of the US. It also has 74m subscribers and is adding them at a rate of 250,000 a day around the world - so while it's commercial stance may be alienating some, it clearly doesn't bother many others.

This is not to say that Hammersley is wrong. If the audience were traditional Web users with geek tendencies, I'm sure what he describes would happen. But that's no longer the majority of the online audience. There's a very sizable proportion who aren't brand refuseniks, who are happy with the online equivalent of a Nike Swoosh on the front of their t-shirt. And that's part of what MySpace is offering, the chance to take the bits of branded material you like and use it on your MySpace page in the way you want. Which seems to me to be the kind of consumer-as-producer approach to advertising that we've been expecting for a few years now. The question now is which brands will be able to rise to the challnge of giving up that much control.

-- Michael Nutley

Community leaders - 07.06.06

I went to a dinner the other night held by The Big Blog Company in honour of Shel Isreal, co-author of 'Naked Conversations'. It was a pleasure to meet him, and to hear his view that communities built by brands are like the company towns of the industrial age: they're monopolies and they won't work. Isreal is convinced that communities will only work if they arise organically.

I also had the chance to catch up with Alan Moore of agency SMLXL. I took the opportunity to try out my theory of ignorable and un-ignorable media on him (see post below). His response was that while he accepted there would always be a role for old-fashioned mass-media advertising, particularly TV, he felt there was no longer the creativity in those media to really make the impact they once had. He also argued that the real way to build a new brand in the digital age is to find existing "passion-based" communities that would be interested in the offer and introduce the brand that way, capitalising on the enthusiasm of the community, rather than using old media to drive people into a new media funnel.

-- Michael Nutley

Helping consumers develop - 30.05.06

Last week I was at the b.TWEEN interactive media forum in Bradford (just-b.com/btween). One of the keynote speakers was John Sanborn, creative director of eBay, who was there to talk about developing a design approach for eBay's brand extensions such as eBay Express, which recently came out in beta in the US.

Talking to John afterwards, he had some interesting things to say about the way design approaches are changing. His first point was the need for what he calls a 'holistic view', which has led to eBay partnering its usability group with its customer research group.

He also pointed out that with design, as with other aspects of development, you no longer have to wait until something is finished to put it out. But this means how you respond to feedback becomes crucial. You have, he said, to create an architecture that allows you to build things up and break them down if they don't work.

And he agreed with views of Microsoft's chief advertising strategist Yusuf Mehdi that I discussed in my leader last week (NMA 25.05.06), that the industry as a whole is not very good at helping consumers discover the improved functionality of new products or new versions.

Sanborn's take was that 'you can't just give stuff to people and expect them to work through it', and he agreed with Mehdi's view that the ideal would be for consumers to discover the new functions as part of their regular use of the product. But he went further, suggesting that new products and sites would tend to appear as a simple layer where form follows function, but with more complex areas beneath that where, for example, social networks could exist.

-- Michael Nutley

User-generated content strikes fear in advertisers - 09.05.06

It's fair to say the late great US comedian Bill Hicks was no fan of advertising. As well as regularly telling anyone in advertising and marketing to kill themselves, one of his routines inolved telling advertisers to stop putting a price tag on everything on the planet.

Now I'm something of a Hicks fan, but it was still a bit of a surprise to find myself having a Bill Hicks moment at Microsoft's Strategic Agency Summit last week.

It happened during a panel discusssion about user-generated content. The parrticipants had gone through questions about whether advertising destroys user communities and what the risks are to brands advertising on sites like Myspace. Then one panellist, who runs an online loans business asked the question. "All this user-generated content is really cool, it's the flavour of the day, but how is it going to drive more leads for me?"

My immediate reaction was well, maybe it doesn't. Maybe not everything on the planet is an advertising opportunity.

But then I realised that the question raised a more important issue. Fear. Just as media companies and their shareholders are scared that the revenue streams from new media activities will never equal the streams that are being destroyed, advertisers are worrying that the new media properties that are being created won't offer the same effectiveness as the advertising vehicles that they're used to, despite all the industry's promises about the benefits it can deliver.

-- Michael Nutley

Digital seems poorly represented in West Midlands - 17.03.06

Earlier this week I wrote a leader for the magazine contrasting Rupert Murdoch's enthusiasm for interactive media with the fact that 42% of SMEs in the West Midlands don't use a computer.

That statistic came from the launch of 'Digital West Midlands', an initiative from the Regional Development Agency to close the digital divide in the area and establish digital technology as a major driver of economic growth. The conclusion I drew was that it was in the interest of the entire new media industry to help educate SMEs about the benefits of interactive media.

So I was surprised when I subsequently saw the list of people involved in the Digital West Midlands initiative and discovered the only new media business listed was the West Midlands Broadband Company. No portals, no search engines, none of the major ISPs.

This is not to denigrate the efforts of the Regional ICT Steering Group. And given the current growth rates of the industry, it probably shouldn't even seem that surprising. But it does seem slightly strange in a week when complaints about public money distorting the market are back in the news.

-- Michael Nutley

The shrinking boundaries of on and offline - 28.02.06

Last week I was struck by the idea that, as more and more media have a digital component, the distinction between on and offline is losing its usefulness.

In most discussions of marketing, TV is seen as offline while the Internet is online. But with the rise of IPTV (television broadcast using Internet protocol, that is, online) and PVRs such as Sky+, the TV experience is increasingly online. The importance of this is that once a medium moves online, consumers can take control. So the distinction becomes that between media where consumers can ignore the advertising, and those where they can't.

This matters because there will always be a need to make a first contact with customers to establish a brand. You need what Mark Stephens, VP and general manager of Avenue A described at Search Engine Strategies last week as 'media tonnage' to deliver audiences in the first place. But as more and more communication is opt-in, you need channels that people can't ignore to achieve that initial communication. So expect outdoor and ambient to become increasingly important - it's tough to opt out of a billboard.

-- Michael Nutley

Online shopping damages specialist retailers - 14.02.06

A few weeks ago I wrote a piece (Broadband boom will alter how we shop irrevocably) (subscription needed) for NMA discussing the effect of online shopping on specialist offline retailers, and the implications of this for larger urban ecosystems. The example I gave was Camden Market in north London, where the bars and restaurants depend for their custom on shoppers at the speciality retailers, many of whom are either being put out of business by the Web or, in the case of second-hand record shops, simply moving onto Ebay.

So I'd like to thank an architect friend of mine for bringing another example from 'The Economist' earlier this month to my attention (http://www.economist.com/displaystory.cfm?story_id=5471703). It talks about the importance in urban regeneration of gay villages, such as Manchester's Canal Street area. But it goes on to outline how restaurants and bars are seeing revenues fall as their customers increasingly choose to socialise online. For Canal Street, this is translating into a more mixed clientele and a general air of tolerance. What it means for somewhere like Liverpool, which wants to emulate Canal Street's success to drive its own urban regeneration, is more serious.

-- Michael Nutley

Does openness risk company brand? - 08.02.06

In next week’s NMA, we’re running the second of our new-look monthly Strategic Play features, this time looking at MSN. One of the interesting things that comes out is the organisation’s increased openness. It’s seen the benefits that Google has derived from pushing new launches out into ‘perpetual beta’, and is aiming to emulate that success.

From a research & development point of view, it’s easy to see the appeal of this approach. You get the input from your users to refine your products, but they accept the trade-off that what’s on offer may be buggy and incomplete. You also get to throw down a marker to the competition, and maybe dissuade them from launching a similar product of their own.

The downside comes in brand identity. You’re chucking all this stuff up, but you don’t know what’s going to work and you don’t know what you’re going to support. The risk is that the identity of the company becomes blurred because customers don’t know what’s core to the company.

It’s unlikely that MSN will fall into this trap, but it’s one any company wanting to tap into a neo-Open Source style of development will need to be aware of.

-- Michael Nutley

New site, same invaluable content - 30.01.06

Welcome to the new nma.co.uk. It's an entirely new site, delivering breaking news about online marketing and ebusiness, covering the Internet, wireless and interactive TV, alongside the news, analysis, features and comment from NMA every week.

We've improved the navigation, reworked the taxonomy and revamped the search. The content is still split by platform, so if you're only interested in wireless, say, or the Internet, you can find everything we've recently written on the subject. It's also split by type of content, so you can just look through the news, the features or the comment.

We've added some new aspects, such as an RSS feed, and this section, where I'll be blogging about the areas NMA covers.

And we've changed the balance between what's free-to-all and what we're charging for. All the breaking news is free for seven days, but after that it's only available to subscribers. Content from the magazine is now only available to subscribers, with a few exceptions including the Site of the Week and the Top 100 Interactive Agencies guide. There's a link to the subscription page as part of the right-hand navigation.

We're pretty happy with the new site, but we're aware that there's still work needed. As part of phase two, the Research section (the old Data page) will be revamped to include much more information about the state of the industry. We're also aware that the site will only succeed if it meets your needs, so now it's over to you. If there's anything else you'd like to see, email me at michael.nutley@centaur.co.uk and we'll do our best to incorporate your suggestions into phase two.

-- Michael Nutley