As an addendum to yesterday's posting, today's Wall Street Journal outlines new data from comScore, the Internet tabulator, on the declining click-through rates in the early part of this year for search ads at Google and Yahoo!
Now, it may be that higher pricing more than offsets any traffic slowdown in generating revenue, but the Journal suggests Internet advertising may not be as recession-resistant as first thought in the U.S.
Two developments in the last day indicate a possible shift in the advertising business model arriving in the digital environment.
Google has predicated its success on the basis of click-throughs to ads it serves, but its stock price reeled in trading early today because of new data indicating that people aren't doing what Google needs them to do --- namely, clicking through.
An earlier study I cited found click-through rates declining heavily in the last year.
Now, Microsoft has come along to tout a new model of valuating online advertising, and it's an interesting concept. Its "engagement mapping" proposal would examine all Internet interaction preceding a transaction --- if I understand it right, where I surfed before I shopped --- to assess who should get what from whom.
Microsoft will roll out the approach in beta in a few days. While the high-profile war between the two digital giants involves Microsoft's pursuit of Yahoo!, this may be an even more interesting play that affects many more people.
The official tally is in and Sunday's Oscars telecast drew an all-time (well, as long as they've been keeping track) low, with about 33 per cent of households tuning in, down from 42 per cent last year.
Sunday's New York Times featured a David Carr argument that the Oscars remain one of our last collective cultural appointments, but today his defence is wearing a little thin. Maybe we're witnessing the end of yet another societal bond.
Now, it might be possible to just ascribe the ratings to an off year. The writers' strike kept a lot of people in the dark about whether there would even be an Oscars ceremony until the settlement a week or so ago. ABC seemed to be blaming the war in Iraq (view the CBS News story on it). And, even though Juno took in a pretty hefty box office total, there weren't any major blockbusters in the largely dark pack for Best Picture.
But all media are facing the fragmentation of audiences and dealing with the new ways in which they are consumed. Newspapers, radio and television are finding new channels and formats to deliver content. The Oscars and the Olympics, two expensive franchises that have delivered audiences, seem the ripest targets for declines in the years ahead as audiences splinter.
It was interesting to see how many media blogged the ceremonies last night and provided running commentary. The Oscars themselves, though, might need a digital facelift, a streaming version that can capture people on their desktops and cell phones and not just in front of the TV set. Even a major event (and the Oscars are, next to the Super Bowl, America's major TV event) has to adapt.
In drilling into Newspaper Next 2.0 from the American Press Institute, it is easy to see the gap between what it advocates and what it witnesses in the newspaper business. While it praises the good first steps of mapping out new niche-oriented microsites and digital businesses, it is clearly saying that won't be nearly enough in the years ahead.
Instead, it believes the newspaper company has to become an "information and connection utility," effectively exploring what jobs need to be done in a community and creating digital entities to serve them. It wouldn't depart entirely from the business of collecting and distributing news, but it would move into knowledge provision and collaboration.
It might be as simple as getting people to talk about issues with each other, as in the exciting new MonroeTalks site, or it can involve versions of Angieslist or Kudzu to help people find services and talk about them.
To do this, the report's authors believe it will be necessary for separate sales forces to drive revenue. On the issue of news itself, it is evident the newspaper would need to serve it through as many channels as technologically possible. While the newspaper will remain, it would emerge in years ahead as just one way of fulfilling the commitment to providing information.
The strength of this report, and the founding Newspaper Next report that preceded it, is in its optimism that the strength of the newspaper company serves as a financial foundation for these innovations.
In my next post I want to look at some of the digital revenue opportunities the report cites.
I want to spend a few days absorbing the American Press Institute's second instalment of its fascinating Newspaper Next project, released today. The first version was one of the most groundbreaking looks at how disruptive innovation can propel newspapers --- or more precisely, news organizations --- into new and sustaining markets.
Its particular recommendation was that newspapers need to perform tasks for non-readers (a mothers' Web site, for instance) and I'm interested in seeing that thread continued in the second report.
The institute's own release on the report cites these highlights:
"The idea that newspapers must broaden their vision to become local information and connection utilities, with products and services to touch every consumer and serve every business in a market;
The concept of the whole market, a universe of consumers and businesses that reaches well beyond readers and advertisers, and that newspaper companies should be striving to reach and touch;
Mega-jobs -- important "jobs to be done" that a wide cross-section of any market will want and need, and therefore the first that newspaper companies should seek to address."
It explores several case studies of organizations doing some of all of these things and, for a news manager, this report is pretty well required reading in this age of transformation.
Much more on this later, and if anyone wants to weigh in, start the thread.
The digital age isn't necessarily ruining any medium. Newspapers and television are adapting and their content is finding a new audience. No one is suggesting they're unscathed, but they sit atop so much content that it's hard to believe they can't evolve.
Two other media at first blush are more seemingly vulnerable: magazines and radio. Magazines seem far too irregular to sustain digital followings, while radio is facing the rabid file-sharing world and MP3 technology.
But the news from those fronts of late offer some sense of survivalism. Magazines in the U.S. are reporting an 8.1 per cent growth in unique visitors online in 2007 over 2006. That total of about 67.5 million is higher than the 62.8 million UVs enjoyed by newspapers. Magazines reported strong growth in page views and reached nearly 42 per cent of all Web users in the U.S., according to the Nielsen Online survey conducted for the Magazine Publishers of America.
Radio, meanwhile, is undergoing the satellite revolution. But one of its senior executives in the U.S. is predicting a new "killer app" for the medium: song tagging.
Jeff Smulyan, CEO of the Emmis Communications broadcast chain, told a digital radio conference recently that the technology permitting people to identify songs they're hearing for possible future purchase is going to be a big boon to the medium. He predicts that the strength of the FM tuner in iPods will generate momentum for receivers in every cellular phone.
When I suggested earlier that newspaper Web sites are entering a period of competing for market share, colleague Bill Dunphy in Hamilton thundered in that, well, duh, we've been doing that for decades.
I think I was echoing the State of the Media report from the Pew Center for Excellence in Journalism that indicated the audience for online news might be peaking.
But Bill raises another significant point: "Information, news, is becoming, or perhaps already has become, a commodity - and the implications that has for our ability to carry out the kind of journalism we love, and our communities need, are frightening."
I think many news managers share that view, that information has long since become highly commoditized and that the rewards will only come in the years ahead to those striving for original or contextual content.
I'm interested in what people might have thought about the Montreal Gazette's venture this week into an edition of contextual and analytical content --- a simplistic description might be a newspaper without a typical frame of news. Certainly the European papers are becoming "viewspapers."
In transforming to multi-media entities, newspapers feel confident they're going to be chosen as reliable sites for content. They command the most resources among local media, generally speaking, so their challenge is to adopt and adapt as their audiences find new ways to consume information.
The Newspaper Association of America has new data on the growth in Web site traffic for newspapers, and it's generally encouraging. Unique visitors increased about six per cent in 2007, to about 60.6 million Americans. The last quarter of 2007 was a record quarter. and some 39 per cent of all Web users visited a newspaper site. There were about three billion page views in the fourth quarter, which represents an increase of about seven per cent --- not gigantic, but quite good.
There are some challenges for papers: Visitors spent somewhere around 44 minutes a month, which is about what they'd spend in a day with a newspaper.
The recent State of the Media report signalled many of the same findings of growth and adaptation, but did suggest the audience for news online may be peaking --- in essence, that newspapers are entering a period of fighting for market share.
The association is, as you might expect, quite bullish on the numbers. It argues that newspapers are becoming the trusted sources in the digital environment.
I've waited all day to post the information about the demise of the Halifax Daily News and its replacement starting Tuesday by a free daily operated by the owners of the News, by Torstar and by Metro International.
Here are some stories about it from our Canwest News Service, from The Canadian Press, and from the News itself.
The Halifax market is dominated by the Halifax Chronicle-Herald, one of Canada's few remaining independent papers, and has a vibrant television and radio scene. The challenge for the new Metro Halifax is to insinuate itself into the commuter cohort. Not all cities are served easily by public transit, where Metro has experienced its greatest successes.
In the latest Infoworld, Technorati CEO Richard Jalichandra comments on the blurring between blogs and conventional media.
"Mainstream media gets it now, and they realize that they can create a lot more content with participation from the community. Today, a lot of mainstream media articles are written on a blogging platform as opposed to a [traditional] content management system, and it's an interesting challenge."
A challenge in two respects: How to cultivate community content and how to ensure it achieves a certain standard of quality. Newsrooms everywhere are wrestling with this dilemma.
On the one hand there is the reality of an expanded public sphere of content that can help shape a conventional organization's content. On the other hand there is the reality of little discipline and verification of content, and that will ultimately pose a serious threat when a legal framework emerges around digital content in such areas as defamation.
Andrew Keen's book last year, The Cult of the Amateur covered this ground, but while it's true that conventional media are getting it, they're also uncertain about what they're getting. This is not an easy blur to accommodate.