Editor's View

Playing catch-up

Platform: Internet | Author: Nic Howell | Source: nma.co.uk | Published: 16.09.08

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The other day I was chatting to a mate of mine who is heavily into music - the kind of soul and disco that collectors used to spend hours in record shops hunting down.

I wondered whether he'd received a nasty letter yet from his ISP about filesharing. After all, whether he's using Senuti (iTunes backwards) to get tracks from his mates' iPods or finding stuff on P2P networks, he happily ignores DRM - if it means getting hold of what he wants. Like most music fans.

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"I don't use Limewire much these days," he told me. "I've been getting most of my music from Facebook."

Here's how it works. You join Facebook groups of people who are into the same kind of music as you and start swapping 'wants lists' of tracks you're looking for. Members then post up links to YouSendit for other members to download the files they want.

It's clunky and sporadic, but if it means getting hold of a tune that's only ever been released on a Japanese CD, who cares?

Whether this will ever be a mass-market proposition is doubtful - it probably won't destroy Last FM's business model. But it raises interesting questions. Most obviously, it demonstrates why the record industry's hate campaign against filesharers misses the point. As well as releasing a torrent (excuse the pun) of music, digital media creates new forms of consumer behaviour. And as soon as the labels' well-fed lawyers catch up, there's a new form of peer-to-peer activity to get nervous about.

Brain power - 13.08.08

Who Has the Biggest Brain? The title of this Facebook application is highly relevant to the latest stage in the evolution of applications-based media.

First, the news broke that Apple’s iPhone App Store had generated $30m (£15.8m) in sales in its first month. And in NMA this week we reveal that Adknowledge has opened the first ad network for Facebook applications.

With characteristic chutzpah, Apple CEO Steve Jobs predicts the App Store market could be worth $1bn. Whether or not he’s right, it looks as though his company could be onto another iTunes Music store, creating an environment where others do the work of creating the software that people want, taking a cut, and in turn generating hardware sales.

Likewise, Adknowledge’s move offers the chance to monetise one of the most explosive aspects of Facebook’s growth, the applications. While we wait with bated breath for Mark Zuckerberg’s team to turn Beacon into an ad proposition that really harnesses Facebook’s massive reach, third parties are betting that SuperPoke, Top Friends and Bowling Buddies will create the kind of audiences advertisers love.

I’m sure development of Beacon won’t be put on hold just because of what Adknowledge and Slide are up to. But maybe the smartest move for Facebook would be to follow Apple’s example and simply create an environment where third parties put the effort into monetising audiences in return for a cut. Whose brain is bigger: Steve’s or Mark’s?

Taking action - 17.07.08

IASH has finally showed its teeth by suspending 24/7 Real Media, after the network declined to take part in this month's audit following our story about ad misplacement on Onlyfights.com.

It's taken three years, but IASH has done something to answer those critics who questioned just how serious the trade body could ever be.

The move shows that since coming back to chair the trade body that he helped to set up, James Aitken is prepared to get tough.

He has to. If IASH membership and audits mean anything at all, it's that there are strong sanctions in place for any breach of conduct. This action demonstrates that the lengthy IASH audit process is not a game, and that IASH is not a cosy club.

It's been fascinating watching IASH grow up in public. While its aims have always been laudable, in the past it has been easy to question just how effective the body could hope to be. In particular, having someone from one of the networks chair the body was always going to provide ammunition for cynics. At one point confidence got so shaky that one top media buyer told me his agency was considering dropping IASH member networks from its schedules.

You may wonder whether it's possible to ever truly eliminate ad misplacement among the millions of ads being served across networks. But IASH is making a real attempt to get to grips with this issue and Aitken's latest move should be applauded.

Multitasking - 04.07.08

Bloody people. Life would be so simple if they simply consumed media in the neat little silos that the media industry has lived with for the past 50 years.

But as yesterday's launch of the second IPA Touchpoints consumer lifestyle and media consumption survey made clear again and again, consumers er, actually do more than one thing at once.

So it's official. People surf while listening to the radio. Or even, gasp, while watching the great god television.

What's so promising about Touchpoints 2, is not that, as Vizeum MD Grant Millar said yesterday, that "the internet has not displaced TV". Or even that penetration of the internet has risen to 73% of all adults since this time last year and online usage has increased by 43%.

What's changed is that media researchers finally have compelling proof that consumers divide their attention between a cacophony of competing voices. It's been a dirty secret in media and has so often been obscured by the debate about which channel is winning.

In addition, Touchpoints 2 tracks how people are using the internet while doing other things. As Millar pointed put it, people are seeking information and experiences and don't care where it takes them. It's a planning nightmare, but the on-demand world has arrived.

Digital native - 20-06-08

At the press conference for the Cyber Lions at Cannes this week it was interesting to hear Cyber Lions President Colleen DeCourcy give her views about the judging and what it said about the state of digital work today.

DeCourcy, who we've interviewed in our Digital Thinkers slot (NMA 27.03.08), said it had been a transitional and an important year. But the jury had spent a lot of time debating whether the work they were judging strictly belonged in the cyber category.

"As digital becomes more and more ubiquitous, it becomes part of every other jury that we've got here," she said, although she obviously qualified this by mentioning she wasn't sure if this applied to radio and print. "But because of that we also found we had a lot of different types of people submitting work. It's not just digital natives. That made a real variety in the quality of submissions".

The suggestion was that as non-digital specialists start experimenting, the quality of the work goes down a bit. Indeed DeCourcy had also been quoted in the Festival's newspaper the previous day as commenting on the disappointing standard of entries.

By the time of the press conference she was playing this down a little, I thought. Perhaps she didn't want to take anything away from the winning entries. Nevertheless, as DeCourcy put it, the signal to noise ratio was still a little off.

DeCourcy likened what's going on to a flat-bed truck. For her, "the more people get on, the lower and slower it goes, but if your intention is to get the most people to where you're going, that's okay". That's an interesting analogy. If everything's going digital, will the truck grind to a halt?

Liberation - 13.06.08

A week is a long time in digital, so it's no surprise that the gap of a few days can reveal a yawning chasm between two sides of the same industry. This week [NMA 12.06.08] we publish an opinion by Billy Grant, joint MD at 2Point9 records, on how digital helped build a worldwide audience for the Brit Asian artists on his indie label.

For Grant, downloaders helped create an international street marketing team. Try telling that to record label trade body the BPI, which scored a somewhat pyrrhic success last Friday when ISP Virgin Media announced it was willing to report people it suspected of illegal downloads of music content.

Leave aside the disconnect between Virgin Media paying Samuel L Jackson to lend some cool to its new model for "liberating" TV, while another side of the business helps the record labels prop up a decidedly unliberated content model. Leave aside the data showing that downloaders can also be heavy music consumers. Leave aside the fact that, after Dire Straits' Brothers in Arms became the first major release to be recorded digitally in 1985, this "industry" had a decade to think the unthinkable about new modes of distribution. Leave aside the fact that the industry's trade magazine Music Week recently let all its reporters go, because the whole ecosystem is stagnating. Just plough on, paying lawyers to turn customers into defendants.

Yet if your house was on fire, would your priority be to find out who started it or get everyone out and then pick up the pieces?

Long-term view - 30.05.08

At an industry awards event the other day I chatted to the marketing director of one of the UK's mobile phone operators. He commented that the war with his rivals felt like an arms race - what with the TV spots, newspaper ads and the digital campaigns, the operators are spending millions every year to simply churn customers between themselves. What was needed, he said half-seriously, was a SALT (Strategic Arms Limitation Talks) process to put an end to the escalating madness.

This comes after a recent feature in NMA in which a drinks brand explained that they needed to include an age-verification page before they let anyone visit their mobile site, which detracts from the user experience.

Fair enough. But what if those kinds of details could be held on a SIM card? Indeed, SIMs ought to be a mine of personal and behavioural detail. In Finland they were even proposed as the basis of a national identity scheme.

The mobile industry ought to take a leaf out of the online industry's book and start to think about unlocking all the value in customer data and the relationships they are building with customers over time. Why does Orange send me texts about the Rugby World Cup when I've never clicked on any of this content in my life?

Sure, the tide of handset innovation is unstoppable and customers love an upgrade. But just supposing an operator took the conscious decision to focus this year not on sign-ups but on retaining customers and deepening knowledge of their behaviour and tailoring content that will make them stay loyal. Can this industry learn to say "deepen" rather than "upgrade"?

All-consuming - 23.05.08

During a roundtable discussion last week for creatives and planners for a forthcoming feature in NMA, I asked everyone why they still chose to work in, for want of a better word, 'digital' agencies. After all, their skills should be quite attractive to any ad agency scrabbling to beef up its digital offer these days.

In reply, people cited the attraction of having to think about the consumer as protagonist in interactive work. The collaborative way of working. But more fundamentally, they like the fact that there are so few parameters.

In most forms of advertising, space is pre-defined; a 30-second TVC, a 96-sheet poster. True, online advertising has banner ads, but apart from that you define the space and how it's filled.

It's worth bearing this in mind when you hear people saying, as they do all too often, that 'everything is digital now'.

Digital is not about the way the signal is transmitted - especially now when all over the country analogue is being switched off. It's about the way that signal is consumed. And one of the fundamental differences, apart from the chance for participation that the TV industry has so spectacularly mismanaged, is that this consumption is on-demand. This has profound consequences for content and the advertising that pays for it.

It reminds me of a very slick presentation given by David Jones, chief executive of Euro RSCG Worldwide, at last year's ISBA conference. He argued that far from being dead, traditional advertising was, ta-da, alive and well. What was dead was the idea of 'non-traditional' or even 'new media' advertising, because with so many people online and owning phones, it's all just 'media' these days.

Nice try, even if I was aghast to learn that new media had been abolished. It would have been polite for Jones to have at least tipped NMA off so we could have printed a black border on that week's issue.

But seriously, his statement glossed over the deeply siloed way that clients and agencies still approach marketing communication.

Everyone agrees all that really matters is coming up with great ideas for an audience. And the integrated approaches of US agencies like Crispin Porter + Bogusky and Swedish shops like FarFar are inspirational.

But here in the UK, with budgets tightening and Soho in gloom, distinctions between traditional and digital are very much alive, boring as it may seem. It's quite disingenuous to suggest otherwise. A year on from Jones' soundbite, last week's roundtable brought home to me that digital is many things, but it's not business as usual.

A good return - 13.05.08

What's a good return? Last week I was helping judge this year's NMA Effectiveness Awards, and ROI was one of the most important criteria for the winning entries. Every year the examples of how digital can contribute to the bottom line get better and better.

But after hearing about how much digital can achieve, I was reminded of a conversation I had with Brand Science MD Sally Dickerson for last week's feature on marketing evaluation consultancies (NMA 08.05.08). She told me that some of the biggest fast-moving consumer good brands in the world settle for an ROI of less than one with their marketing activity.

So why do they bother?

First of all because their competitors are doing it, Sally explained, so if they stop then their rivals will get the double whammy. But second, because marketing is not just about creating short-term sales. It's about trying to create brand equity so that you might be able to increase your price premium or launch a new product more easily.

It's old school stuff - delivered with a rather depressing comment on marketers' herd instinct. But here's the twist. Digital ought to offer a great way to build brand equity because of the scope for building dialogue over time. But that pre-supposes many things. Marketers have to be geared up and motivated to manage long-term relationships. With senior marketers usually in harness for around two years or less, that sounds hard to achieve. As Mark Cridge, Glue London CEO pointed out in his NMA column last week (NMA 08.05.08) it's all too rare for budget to be held back to fund this kind of ongoing dialogue.

But secondly digital also has be prepared to drop the focus on direct response and narrow campaign goals. If some of the world's biggest advertisers are looking for something beyond immediate ROI, what can we bring them?

There's a business school story about a group of forest fire fighters who were wiped out in a tragic incident in the US. An academic worked out that if the fighters had abandoned all their equipment, they'd have been able to outrun the spreading fire. Sometimes the bravest thing to do is jettison the things that define you.

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.

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.

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.

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.