Two ways media’s changing now, and two ways it’s going to change:
The FT Digital event in London last week pulled together some of the cream of the European media world. The big conclusion they were made privy to?
The media world will soon discover exactly how many ways you can skin a cat.
The old-fashioned way for media brands to skin a cat – make the content and license rights to distribute it, or advertise next to it – doesn’t work anymore as a standalone product. As a result, the business model experimentation we’ve seen so far in the media world is turning into business model explosion. Evidence: Half of the speakers and attendees at this media event wouldn’t have been at a media event at all only three or four years ago. Facebook. Shazam. BuzzFeed. And tech VCs, for example.
Two pieces of news exemplified changes taking place right now: One, Facebook’s acquisition of Oculus (a virtual reality gaming device) forced discussion toward the value of a platform – the device is only as valuable as the community of developers creating remarkable content for it; tech and media companies alike need to take a platform approach to their assets.
Second, The New York Times’ launching of NYT Now – a premium version of the Times exclusively for smartphones – showed how media companies are bending themselves backward to divorce (call it “conscious uncoupling” if you will) resources from revenue. The mobile app will take a Facebook-like approach to making money by allowing advertisers to publish sponsored content in-feed.
And two discussions painted a picture of media’s future:
When March comes to a close, the madness in the US picks up: March Madness, the national college basketball championship, gives sports fanatics the chance to rally around their alma maters, while sports novices get to observe college basketball culture at its best. Personally, I tend to lean to the latter end of the spectrum — but this year, thanks to a redesigned mobile app and enhanced social engagement strategy, I find myself moving away from observer status toward that of participant.
My story isn’t unique: The features and functions of sports-related mobile apps allow fans of any knowledge level to receive immediate updates, learn more about players and teams, and connect with fellow spectators across the region — and globe. From reviews of the recent winter Olympic Games to preparations for the upcoming FIFA World Cup, “sports fever” is universal. Forrester’s Consumer Technographics® data shows that while the impulse to engage with sports-related apps on portable devices is evident around the world, it is most noteworthy among consumers in Metro China and Metro Brazil:
In days gone by, when a British monarch died, the town crier would roam the streets of London calling out, “The king is dead. Long live the King.” This seemingly contradictory statement announces the beginning of a new regal era. The old king is dead; long live the new king. In 2013, the old era of siloed digital marketing ended and a new era of what Forrester calls post-digital marketing began. There was no official town crier and so perhaps you missed these headlines:
January 2013: Forrester’s David Cooperstein observed, “We are at another inflection point, as we move from digital marketing as a renegade effort to post-digital marketing . . . We are entering a world where digital innovation is merging with traditional marketing fundamentals to create new approaches, new brand leaders, and new models for success.”
September 2013: Procter & Gamble’s Global Brand Building Officer Marc Pritchard echoed this sentiment when he declared the end of the digital marketing era, saying that all digital marketing is “just brand building.”
NBC recently announced that it would be streaming its coverage of the 2012 NFL Super Bowl online. NBC has streamed big events before (2010 Olympics, Sunday Night Football), but the big difference here is that it is selling video ads that will run exclusively on the online stream independently of the TV broadcast. This is a huge step for NBC as an ad seller since it is recognizing its untapped online audience and attempting to monetize it. Although the Super Bowl streams (restricted to the US only) are expected to greatly pale in comparison to linear TV viewership, Forrester expects the streaming audience of the Super Bowl to grow dramatically in years to come.
2011 has seen some major change in advertising. Although TV is still king, there’s no denying that online video, across a wide variety of devices, is experiencing strong growth. TV advertisers must now contend with smartphones, computers, and tablets as alternative sources of premium video content for engaging viewers with targeted ads.
As media fragmentation increases, marketers will need to rethink their strategies and start to look at online video and TV as two sides of the same coin. In our latest report, “Why Marketers Must Integrate TV And Video Strategies” (subscription required), we make the case that marketers will merge their online video and TV advertising teams to more efficiently reach their audience across whatever screen they happen to be watching. Next month, our VP Practice Leader, David Cooperstein, will be speaking at the ANA TV & Everything Video Forum in New York about how marketers’ attitudes and strategies are shifting in the face of this new media convergence.
For the 2010 launch of his autobiography Decoded, hip-hop mogul Jay-Z ran a teaser campaign with Bing that released one page of the book per day on out-of-home signage; people across the US tried to decode the pages from buildings, pools, and clothing racks. Jay-Z is one of many marketers giving the once-stagnant out-of-home channel an infusion of digital and creative innovation. Place-based networks, digital signage, digital billboards, and hybrid installations offer an array of options for marketing leaders to consider as they try to reach on-the-go consumers. This reinvigorated medium offers marketers greater relevance, engagement, and interaction. It grabs consumers with content at the right time in the right place — when they are about to make a purchase decision — and offers the immediacy of instant gratification or information through smartphone-enabled technology.
To get a picture of this new media landscape and to find out more about how leading marketers have begun to use digital out-of-home, check out my new report, “Digital Remakes Out-Of-Home Advertising."
What do you see in the future for digital out-of-home? Are you ready to get outside?
Budget season is upon us. With a rapidly changing media landscape, many marketers are re-evaluating how they allocate their marketing dollars. How is your budget changing for 2012? Will you take back TV dollars? Spend on social? Move more to mobile? Invest in innovation? I'm writing a new report that will take a look at marketing budget plans for 2012 to help marketing leaders understand how they should benchmark their budgets. Please take a 10-minute break from your email overload to take our survey and tell us your plans. What's in it for you? Take your choice of one of our top summer reports and a copy of the survey results — your own direct line into what your colleagues are planning.
More than 90,000 iPad-only apps are available today. Forrester clients in a wide range of industries — media, software, retail, travel, consumer packaged goods, financial services, pharmaceuticals, utilities, and more — are scrambling to determine how to develop their own iPad app strategies (or browser-based iPad strategies).
Clients are asking us to help them address both challenges and opportunities associated with the iPad: How do I develop an app product strategy for the iPad? Does the browser matter, too? What will make my app or browser experience stand out from the competition? How will an iPad app complement my smartphone and Web properties?
If you are navigating these sorts of decisions, I'd like to invite you to a very exciting event being hosted by an analyst on my team, Sarah Rotman Epps. Sarah's holding a Workshop on July 27 (in San Francisco) to help clients like you separate the hype from the reality and take concrete steps toward developing a winning iPad app and browser strategy.
The Workshop: POST — Refining Your Strategy For iPads And Tablets
This Workshop focuses on refining your strategy for reaching and supporting your key constituencies through iPads and other tablets. We'll take you through the POST (people, objectives, strategy, and technology) process, helping you to:
Understand where the tablet market is going based on Forrester's latest data and insights.
Apply what other companies have done to your own tablet strategy.
I am excited! Not just about the fact that Forrester's Marketing Forum is just around the corner. I am excited because I just got to spend some time with Ross Martin, the energetic executive vice president (EVP) of MTV Scratch. His team is a center of innovation at MTV for helping marketers connect with millenials, and his enthusiasm for the next digital decade is palpable. If you are coming to the Forum in San Francisco next week, you will get to hear Ross and his client and counterpart Jim Trebilcock, CMO at Dr. Pepper Snapple (DPS) Group, talk about the nationwide launch of Sun Drop soda that kicked off a few weeks ago.
Not to spoil that story, here are some of the things Ross and I discussed about the future of marketing:
DC: Given what you have done with DPS, what do you see as the future agency model? Can media companies replace agencies?
RM: We see new and inspiring work from agencies every day and have been lucky to collaborate with some great partners. Much has been said about the challenges agencies face with so many new models emerging. We believe these new models will continue to evolve, as agencies large and small pursue new ways to serve their clients.
Great agencies will look to capitalize on the strengths of media companies in both traditional and nontraditional ways — from ad sales and integrated marketing to the kinds of services Scratch offers, such as design and product planning, retail activation, creative execution, social media, marketing strategy, and more.
Just came off the stage at PaidContent 2010, a day-long summit here at The Times Center near Times Square, dedicated to the question of if/how/when people will pay for content. The timing is good -- as I wrote in January, The New York Times is planning to charge for content within a year or so, Hulu is considering a subscription model (not necessarily in place of but, I believe, in addition to its free service), and the eBook pricing dilemmas are causing sleepless nights.
I opened the conference with a brief assertion that fretting over whether people will pay for content is based on a mistaken assumption: that people have ever paid for content in the past. They actually haven't. Instead, people have paid for access to content. But in an analog world, access was gated by physical form factors like vinyl, newsprint, and movie theaters. As a result, the coincidence of form factor and content made us believe that people pay for content.
But people have never paid for content. Even when a daily newspaper was a necessity for the average home, the dime you paid a day (in the 70s) for a newspaper did not cover the print cost, much less the reporting. Instead, it was classified ads and auto dealers who footed most of the bill. And the hours we spent on TV and radio every day through the last half of the last century until the explosion of cable in the 90s, were all free. When cable finally asserted itself, people did not pay per show or even by channel (with the exception of premium movie channels). Instead, they paid for overall access.
It was a surprising weekend for those of us who had naively imagined that after crossing the River iPad, we might actually get some Elysian rest. But, alas, the fates conspired against us and handed us the curious case of Amazon vs. Macmillan. Or Macmillan vs. Amazon?
For those who actually took the weekend off, let me summarize what happened. John Sargeant, the CEO of Macmillan Books, gave Amazon a wee-bit of an ultimatum: switch from a wholesale sell-through model, where Amazon buys digital books at a fixed wholesale rate and then can choose to sell those books at whatever price it deems appropriate (even at a loss, as it does with $9.99 bestsellers), to an agency model, where Amazon agrees to sell at a price set by the publisher in exchange for a 30% agency fee. Sargeant explained to Amazon that if it did not agree to the switch, Macmillan Books would make its eBooks subject to significant "windowing" wherein new books are held back from the digital store for some period, say six months, while hardback books are sold in stores and possibly, digital copies are sold through the iPad at $14.99.
This is more detail than we usually know about a negotiation like this because of what happened next. Sargeant got off of a plane on Friday only to discover that Amazon had responded by pulling all Macmillan books from the Kindle store as well as from Amazon.com. He then decided to make it clear to the industry (and his authors) that this drastic action was Amazon's fault, in a paid advertisement in a special Sunday edition of Publishers Lunch.