FOLIO: BLOGS Guy LeCharles Gonzalez

Is This the Death of Permission Marketing?

Mon, 03 May 2010 10:19:21 -0400

Facebook's announcement of its Open Graph initiative and release of a variety of easy-to-use Social plugins has set off another hot debate around privacy, with even MoveOn.org and NY Senator Chuck Schumer getting involved.

From a personal perspective, I've always understood the tradeoff that comes with using "free" services like Facebook, Google, Twitter, Glue, et al; EVERYTHING I do is being tracked and recorded, to be mined in real-time and/or at some point in the future to "target" me for "relevant" messages, products and services.

Facebook is catching a lot of flak right now, perhaps most humorously on Twitter, where some people are announcing they've closed their Facebook accounts without the slightest hint of irony. As if their activity on Twitter—the people and brands they follow and engage with; the links they shorten and retweet; the pictures they post; the Foursquare check-ins—all of it tied to an email address, isn't being tracked, recorded and mined for purposes that are mostly unknown right now, but likely as "controversial" as anything Facebook has ever announced.

I've always assumed this was the case, even way back in the days of CompuServe and AOL, both of which were PAID services, and we all know it to be true today in the illusory era of FREE. So in that light, Facebook's enabling people to "Like" everything on the Internet and feeding that data back to publishers and marketers doesn't surprise me at all. It's actually pretty brilliant on their part, and I'm a bit surprised Google didn't beat them to it.

What bothers me, though, is HOW they're going about it, repeating their mistake with Beacon by choosing an opaque opt-out implementation instead of trusting in the value of the service they're offering and allowing their users to opt-in.

Beacon, which launched in late 2007, basically tracked the activity of Facebook members on certain partner sites and then posted an item in users' news feeds when they purchased something.
Facebook, however, did not adequately communicate to members that this information was being collected. Users were irked when purchases made on other Web sites showed up on their news feeds ("John bought a diamond ring from XYZ"), prompting MoveOn.org to suggest that Facebook had ruined Christmas. Facebook tweaked the service and apologized, but the snafu still led to a class-action lawsuit filed by disgruntled users. Facebook Partners With Nielsen, Ditches Beacon

Facebook shut down Beacon two years after it launched, and the lawsuit was finally settled last month, but they apparently didn't learn anything from it.

Anyone who's worked in email marketing has undoubtedly faced a similar dilemma when launching a new enewsletter, especially when working with a large, unsegmented database. (Facebook, of course, has the kind of segmentation marketers dream of!) Do you take the short cut and add the entire list, perhaps under the guise of a "trial subscription", allowing subscribers to opt-out? Or, do you take the time to build the list organically via an opt-in campaign?

The temptation to choose the faster opt-out route is hard to resist, and the rationalizations for why it's legitimate are legion, but in most cases, the value of that list will depreciate faster than a brand new Yugo. So much is made of "trust" these days and its value in engaging one-on-one with readers via social media, and yet that same sense of trust is rarely a consideration in other areas of marketing where readers are viewed as consumers and aggregated bits of data.

The opt-out norm in Facebook—and on many other sites—is not in the better interest of people; it's in the better interest of companies... Many of you are playing with Facebook's data. Others of you wish to be. The Social APIs are exciting and there are so many possibilities. Facebook has one of the most fascinating sets of Big Data out there. It reveals traces of people's behavior around the globe and provides the richest articulated social network out there. But you're also playing with fire. Much of the data that is publicly accessible was not meant for you to be chomping away at. And distinguishing between what should be publicized and what shouldn't be is impossible. People are engaging with Facebook as individuals and in small groups, but the aggregate of their behavior is removed from that context. People are delighted by the information about their Friends that provides better context, but completely unaware of how their behaviors shape what their Friends see. This creates challenging ethical questions that are not going to be easy to untangle. -- Danah Boyd

We're testing Facebook's "Like" button, but Digital Book World doesn't have its own Facebook page primarily because of the issue of context that Boyd notes. While I agree that it's "a potential gold mine" for publishers, and some of my colleagues use it as a public platform, I'm still grappling with the ethical questions around digging into that gold mine and likely will be for a long time.

LinkedIn, on the other hand, has a clearly professional context, and we take full advantage of it because of that.

As technology continues to evolve at a rapid pace, putting heaping amounts of data on our plates and offering a variety of utensils to slice, dice and (ideally) analyze it, Boyd's words of caution should be taken very seriously by every publisher who sees only opportunity in that gold mine, and not the potential dangers.

The principles of "permission marketing" haven't changed just because technology has introduced shortcuts. If we're truly serious about interacting and engaging with our readers and not continuing to depend on 3rd party intermediaries for data, we need to think twice about how much we "like" what Facebook has to offer.

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How Much is a Magazine’s Content Worth? Part Three

Mon, 08 Jun 2009 11:57:40 -0400

The rise of the social Web has given birth to a phenomenon similar to the indie film revolution of the 1990s, when everybody thought they had an interesting story to tell, and believed a credit card limit of a few thousand dollars was all it took to become the next Robert Rodriguez. (He even wrote a book about it.)

Most bloggers fall into similar territory, minus the upfront financial investment, and, as noted in the New York Times on Friday ("Blogs Falling in an Empty Forest "), the failure rate is roughly the same—astronomical:

According to a 2008 survey by Technorati, which runs a search engine for blogs, only 7.4 million out of the 133 million blogs the company tracks had been updated in the past 120 days. That translates to 95 percent of blogs being essentially abandoned, left to lie fallow on the Web, where they become public remnants of a dream—or at least an ambition—unfulfilled … Richard Jalichandra, chief executive of Technorati, said that at any given time there are 7 million to 10 million active blogs on the Internet, but “it’s probably between 50,000 and 100,000 blogs that are generating most of the page views.” He added, “There’s a joke within the blogging community that most blogs have an audience of one.”

It’s worth noting that a percentage of those abandoned and lightly used blogs belong to traditional publishers who didn’t understand what a blog was but launched them anyway, partly because everyone else was doing it. Interestingly, many of these publishers have also bought into the notion that bloggers are legitimate competitors to their established brands and devalued their own content in response by giving it all away for free online and, as noted in parts one and two of this accidental manifesto, are effectively doing so in print, too, all in the service of delivering as many eyeballs as possible for their advertisers with no Plan B in place for when the advertising dried up.

You Gotta Have Soul
At last week’s Conversational Marketing Summit in New York City—a new media strategy session dedicated to helping brands “join the conversation” that the social Web has pretty successfully excluded most of them from so far—Federated Media Founder and CEO John Battelle’s opening remarks spoke just as directly to traditional publishers, too: “Ad networks have scale and data, but they lack soul. Customers don’t join ad networks.”

His reference to “soul” struck an especially warm chord with me, as it’s something many “old media” brands already possess but haven’t always successfully leveraged online. That slow response left a huge opening for personal brands to evolve exponentially, gain precious mindshare and become competitive with the established brands that once nurtured them as featured columnists and editors-at-large. It also allowed savvy brand marketers to connect directly with consumers instead of having to go through traditional intermediaries.

And yet, amidst all of the dire predictions about the death of print, the one thing I’ve yet to see is a single industry study—or even an off-the-cuff anecdote from a moderately respected pundit not employed by a digital ad agency—that says consumers are demanding more advertising.

What consumers have demanded more of is control over the overwhelming amount of content that is now available to them online, and there are a wide variety of applications that facilitate the consumption, sharing, and yes, production, of content of all kinds and levels of quality—along with a number of ad-blocking apps thrown in for good measure.

Content Still King

“Gatekeeper” is a four-letter word on the publishing industry’s conference circuit these days, a straw boogeyman invoked to elicit visions of old white men in leather chairs dictating what the masses should and shouldn’t be reading. Who needs traditional publishers when the almighty (and ever-changing) algorithm and the “wisdom of the crowds” threaten to extract the soul from all content, leaving us with LOLCATS, Jon and Kate and Blogola?

There will always be gatekeepers of one form or another, whether traditional publishers or the crowd-sourced variety. In both cases, the crowds are usually led by a few vocal minorities, and both have a history of chasing trends while ignoring new voices and ideas, so what’s old is basically new again.

The true value of content is more measurable than it’s ever been, so publishers’ primary focus should be on curating great content that people are willing to pay for, and to organize and nuture a community around that content and the authors who create it. That community will exist in multiple places and spaces, and vary wildly in size; in some cases, they won’t be the least bit interested in having advertising invade their space, overtly or covertly.

Contrary to popular belief, print advertising definitely is not dead. It will need to evolve, and publishers, agencies and marketers are going to have to hit the reset button on their digital initiatives and refocus on the most important part of the equation: the consumer.

Marketers (and their agencies) and the publishers that need their support have to start treating each other as partners and not adversaries, working together to develop initiatives that engage their respective communities, not just pitch products at them after fighting over discounts off the illusionary rate card.

'Technology Forces Reinvention'

At the CM Summit, GCA Savvian Advisors’ Terence Kawaja offered some interesting insights, including a scathing parody called “The Day the Media Died” and the provocative statement: “What if low CPMs are the real ‘value’ of ad inventory? Technology forces reinvention.”

In an ideal world, traditional publishers would take the opportunity to reinvent their business model and approach 2010 as follows:

Place a clear value on all content and offer it in a variety of mediums, as dicated by the community’s needs, not the publisher’s budget line items.
Abolish the rate card and don’t accept spreadsheet-based RFPs.
Most importantly, ensure their content, and the products they’re advertising, are all worth paying for.

There’s only so many ad dollars to go around these days and the media contraction that’s already underway will continue to weed out the weakest brands and seasick investors. If a pure-play brand is a legitimate competitor to your established print brand—whether for readers, advertisers or both—you don’t have a viable business model anymore. Period.

For magazines, this will mean investing more in their content, ensuring that it’s not just high-quality, but also unlike anything that’s available elsewhere. Premium content allows Harvard Business Review and Cook’s Illustrated, among others, to charge premium subscription rates in print alongside a freemium online model. Hearst was recently noted for the apparent success of its contrarian strategy, increasing the physical size of their magazines, raising newsstand prices and severely limiting the amount of print content that makes it online, arguably offering their readers a higher quality product and their advertisers a more desirable platform.

For those magazines whose content is more commodified, it will mean striking a better balance between a more compelling context worth paying something for—controlled circulation will become the domain of custom publishing over the next few years—and developing new channels for both themselves and their advertisers to engage their community with relevant content and product information.

For those with commodified content and no significant advertising base—or worse, one that “got” the Internet first—the outlook, to be frank, is rather bleak. Micro-niche plays like this can usually survive on their own better with less overhead than within a corporate structure where resources are more plentiful but prioritized according to revenue, and are probably better suited as pure-plays anyway.

What do you think?
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How Much is a Magazine's Content Worth? Part Two

Wed, 27 May 2009 15:00:52 -0400

SEE ALSO: Part One
“If what we have isn’t valuable and no one wants to pay for it, maybe we don’t have a business.”
–Jim Malkin, CEO, SourceMedia, at the 2009 FOLIO: Growth Summit

Let’s be honest for a second, put our egos aside, and admit one thing: many magazines currently being published could fold tomorrow, and few people beyond their respective mastheads would notice.

Don’t believe me?

Pop quiz, hotshot: Pick any magazine, first one that comes to mind, and check its subscription rate.

What’s the most you would pay for a 12-issue subscription? If it’s less than $29.50, I’d argue that you won’t miss it much when it’s gone because you don’t place much value on its content. Further, if it’s being sold for less than $29.50, I’d argue that its publisher doesn’t place much value on its content, either, so why should you?

Most magazines are advertising platforms whose readers are defined as “targets,” valued in quantity over quality. When the advertising revenue stream dries up, the magazine usually folds, readers be damned.

It’s a business model that has ruled for decades, built upon a smoke and mirrors combo of deeply discounted, often unprofitable subscriptions, expensive newsstand distribution and deceptive metrics long accepted as industry standards.

The Business Model is Broken

The most recent example of this flawed approach ("Why Portfolio Folded, And What It Means for Business Magazines") is Condé Nast Portfolio, a much-ballyhooed entrant that attempted to muscle its way into a crowded business magazine marketplace that arguably didn’t need it, doing it the old-fashioned way and failing despite having a “total and verified circulation of 449,005”:

“Our timing proved to be terrible in terms of building a big ad franchise from scratch,” group publisher David Carey told the Associated Press. “We saw where we are and where we want to be in 18 months. The gap between those two points was becoming bigger.”

As a result of the closure, more than 85 employees will be let go…

Billed as a business publication with big, bold articles and dynamic visuals, Condé Nast reportedly spent more than $100 million to launch Portfolio in April 2007. The magazine watched ad pages plummet 60.9 percent during the first quarter, according to Publishers Information Bureau figures.

With advertising revenue less reliable than ever—overall ad spending declined another 15.1 percent in Q1 2009 (Bernstein’s Research)—this prolonged and brutal economic downturn will claim even more magazines before the year is over, requiring the rapid development of alternative revenue streams and pitting those still standing in an intriguing, high-stakes game of “Outwit, Outplay, Outlast.”

One of the seemingly obvious steps to take would be to raise the deeply discounted subscription rates that were formerly subsidized by advertising, sending a clear message to readers (and advertisers) about the true value of the content being published. While most magazines would undoubtedly lose subscribers, those they retained would be more engaged and more responsive to relevant advertising and direct-to-consumer offerings.

Unfortunately, that decision brings up the one question so few publishers want to answer, but can no longer avoid: how much is their content really worth?

You Get What You Pay For

In part one of this blog series, I criticized Fast Company and Inc. for their combined subscription offer ($15 for 10 issues of each magazine), which effectively told me that my eyeballs are worth more than their content.

Both are magazines I’ve picked up at the newsstand on occasion, at full price, so I’m probably going to fill out that subscription card because it’s such a great deal, effectively 20 issues for the price of 3. Chances are good that between them, I’d buy three more issues on the newsstand over the next year, so while I probably won’t be one of their most engaged readers, I really can’t lose.

For most of their advertisers, though, unless they’re in it for brand recognition and have some long-term plan to engage me, I’m pretty much dead weight, fluffing the rate base they’re paying to reach, usually via ill-conceived, short-term interruption campaigns.

As seen in the image above, the New Yorker and Portfolio were offering a similar combo that valued the former at $1.00 an issue and the latter at 83 cents an issue. Both are/were prestigious, award-winning magazines that aim/ed a bit higher than the average editorial mission, but are/were priced as commodities instead of the premium offerings they aspire/d to be.

Of the magazines I noted in my first post, I’d align them most closely with the Atlantic, which currently has a one-year, 10-issue subscription rate of $29.50.

To answer my own pop quiz, which magazines would I pay $29.50 for a 12-issue subscription?

The Atlantic: Probably; I already renewed for 3 years @ $39.95, before their redesign and rate increase, but if they once again locked down their online archives for subscribers only, I’d consider the higher rate.
Gourmet: I wouldn’t, but my wife might; especially for a subscribers-only online database of recipes and book deals.
Garden & Gun: It’s a great lifestyle magazine with a literary bent, featuring excellent writing and photography designed specifically for the printed page. It’s more of a newsstand magazine for me, though I’ve picked up every issue since I discovered it, but I could imagine its core audience paying $29.50/year for a subscription as long as the content remained top-notch.
Fast Company and Inc.: These are the kinds of magazines people are thinking about when they say the Internet is killing print. They’re primarily advertising vehicles with solid content, all of which can be found on their websites for free. They’re also not must-reads for serious business people like the Harvard Business Review which sports a $99/year subscription rate, a $16.95 cover price and still has a solid advertising presence.
Wired: It’s a fun, somewhat self-indulgent magazine, but not at all a must-read for anyone. Also, why isn’t it free?

Content + Context = Value

I’m a firm believer that content is king and context is its equally powerful queen.

I also believe the idea of individual blogs killing off newspapers and magazines is an exaggerated notion that’s making a lot of marketing savvy individuals good money on the conference circuit, but doesn’t really hold up to scrutiny.

My definition of a magazine is pretty simple: a curated collection of content, branded under a clear editorial mission and vision, and packaged to serve a clearly defined audience or community according to their needs and preferences. It’s a platform-neutral definition by design that puts the reader first, requires investment relative to its scale, and is a concept publishers need to come to terms with as quickly as possible.

The magazine industry is at a critical juncture, and the decisions being made now and over the next 12 months will determine who survives as more than a hollowed-out shell to be sold to a competitor, if not shuttered outright. An old boss of mine known for her turnaround skills had a philosophy about allocating resources that I’ve come to embrace: if it’s not performing, don’t be afraid to take it behind the shed and put it out of its misery, and dedicate those resources to something new, or to make something already profitable even more so.

I’d argue that it’s way past time to take the ad-supported business model behind the shed, and to start focusing on increasing the value, true and perceived, of the content we publish.

More on that later this week …
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How Much is a Magazine’s Content Worth? Part One

Tue, 26 May 2009 12:22:38 -0400

I love magazines.

Despite most days feeling like someone pushed the self-destruct button and we're all scrambling for the escape pods, I will always love them, especially and above all, the printed format.

I'm no fetishist or luddite, though, and while I tend to favor print, my definition of a magazine is platform neutral. I've worked in magazine publishing for over 15 years now—from audience development to advertising sales, freelance editorial to events planning, corporate to D.I.Y.—and stand firmly with the digital generation that's purportedly out mugging elderly newspapers in broad daylight, and striking fear in the hearts of cowardly and superstitious magazines in the middle of the night.

Seeing subscription offers like the one above for Fast Company and Inc.—two solid print magazines devaluing their editorial content at only 75 cents an issue while simultaneously making it all available for free online—I think that the death of the current ad-supported model is inevitable and, arguably, a good thing.

Portability and endurance are two theoretical advantages print magazines have over their digital competitors, but the ability to deliver engaging, focused and original content cheaply and on a consistent basis is much harder to do in print than it is online, where expectations are lower and the exchange rate is more favorable. Paradoxically, magazines' own online presences are, more often than not, commensal partners at best, if not outright parasites.

In a typical ad-supported print magazine, even the best editorial intentions are constricted by the costs of printing and postage which are subsidized by the diminished and ever-fluctuating advertising revenues that ultimately dictate page counts. They're further contradicted by mixed messages about the actual value of the content itself, as in the insulting subscription offer above.
My Relationship with Print Brands

I was doing some Spring cleaning this weekend, and part of it involved going through the ridiculous piles of magazines that had accumulated around the house over the past several months—a wide range of titles reflecting personal interests, competitive research, random newsstand browsing and "forced-free trials." While sorting them into save and recycle piles, I was struck by how many of them I hadn't flipped through yet or even recalled pulling out of the mailbox, including some of my supposed favorites.

The pile of unread copies of the Atlantic was perhaps the most galling. I often note it as one of my absolute favorites, and yet its exemplary collection of well-written, long-form journalism rarely gets more than a quick flip-through when it shows up in the mailbox, set aside to read when I have more time that never seems to materialize.

Coincidentally, I also subscribe to Andrew Sullivan's Daily Dish (via Google Reader and, for a short while, on Twitter), but the volume of content he generates can be overwhelming, and I've found myself lately only skimming headlines and rarely clicking through to read full posts. While his purposefully fleeting bits of data, links and reflexive commentary are of a higher quality than some magazines' feature articles, they're usually buried under his steady stream of content by the end of the day, unlikely to ever be seen again, except possibly via a relevant Google search somewhere down the road.

I ended up saving most of the unread copies of the Atlantic, fully expecting to read and enjoy them in the near future, partly from having the Atlantic brand and what it represents steadily drummed into my head every day, courtesy of Sullivan and Ta-Nehisi Coates' hyperactive RSS feeds.

Meanwhile, included in the recycle pile were several copies each of New York, W and Wired, three magazines I started receiving, unrequested, out of the blue a while back. New York and Wired weren't totally unreasonable guesses based on surface demographics—I'm assuming they both pulled me from the Atlantic's mailing list, or possibly the New Republic's—but I actively hate the former's editorial focus, and the latter is an occasional newsstand pickup whenever the cover looks interesting. W, though, made absolutely no sense at all and represents the kind of junk mail "audience development" that fluffs up far too many magazines' mailing lists for advertisers' benefit—missing rate base means make-goods and deeper discounts—and ultimately hurts them both in the end when complaints about a lack of ill-defined results leads to a vicious cycle of even lower ad rates and a further devaluing of content.
The Save Pile

One unrequested magazine actually made it to the "save" pile, thanks to my wife. Gourmet was sent to me—almost as much of a reach as W—but after a couple issues, she was intrigued enough that we might actually subscribe to it for real, assuming they don't just keep sending it to us for free.

Notably, I don't regularly (if ever) visit any of these brands' Web sites and wouldn't pay to access their content online, though Gourmet at least has the potential to develop a multi-platform option that would appeal to my wife.

I'm not a fan of using one's own habits as a benchmark, but I suspect there's a lesson here for publishers and marketers alike: impressions have nothing to do with engagement, and in the end, engaging content appropriately packaged will find its audience.

That's a victory for quality content curated with an emphasis on a specific community over generic demographics, but it poses a serious dilemma for publishers who are overly dependent on advertising and have conditioned readers to expect to pay as little as possible, if anything at all, to receive that content.

The one question so few publishers want to answer but can no longer avoid is, how much is their content really worth?

More on that later this week...
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