It's Rishi

Oh how mainstream media has changed over the past decades. Back in the 1960’s, during JFK’s presidency, news outlets wouldn’t publish any stories about the president’s infidelities. News editors had a sense of responsibility towards upholding the values and code of our society. There was no need to blemish the president’s name for little good would have come from it. Back then, news was controlled by a handful of agencies. Not only did these agencies have control over what news was received by citizens across the nation, but also when they received news. There were no 24-hour cable news channels and of course there was no Internet.

The landscape of news exchange/delivery today could not be more different. Major news outlets source and publish news around the clock and around the world. Americans are able to receive news wherever and whenever. News is no longer thought of as a single collection of headlines that you consume at once. Instead, news is a continuous flow of stories and headlines that is streaming whether you’re there to catch it or not. The consumption of news went from being a 30-minute event each morning or evening to being a virtually constant activity. How did this happen? Where is all this news coming from?? From two places:

The world shrank – Digital information networks enables news to efficiently travel across the globe in an instant. Now only can data travel at the speed of light, but there is a connected path from the news source to the news consumer. Often, very little human intervention is involved.

Citizen journalism – Digital cameras/videocams, camera phones, laptops, and wireless connectivity allow every one of us to capture the events of the world. I would venture a guess that the majority of Americans under the age of 30 now have atleast one device capable of digital capture with them at all times. We then take this digital information and disseminate it to the world via social-networking sites, blogs, online photo albums/streams, YouTube, message boards, etc.. An average citizen doesn’t have the reach of NBC or CNN, but as is seen every day on the Web, viral citizen media can spread like wildfire and ultimately achieve the same or greater reach as a mainstream media broadcast.

With so much news being created and so many new ways by which news can be spread, there is tremendous competition for people’s attention. I’m not suggesting that the big media companies are going to be extinct any time soon, but I am suggesting that their role in society is. Let’s face it, NBC was thrilled when Cho’s package arrived in their mailroom. NBC said they spent hours deciding whether to air footage from Cho’s videos on the air. There’s little doubt in my mind that they were going to broadcast it. How could they not? The fact that Cho chose to send the package to NBC affirms NBC’s stature as a dominant media outlet. The only issue that they may have been wrestling with was whether to air it and get a backlash from the public, politicians, or special interest groups who might denounce NBC for sensationalizing the Va Tech shooter. However, if NBC didn’t air the footage, they would have no doubt posted it on their news website, MSNBC.com. I’m sure the NBC execs realized that if they didn’t release it, eventually the material would at some point get leaked and in this case, NBC wouldn’t get the limelight for having the scoop.

If Cho would have simply posted all his videos to a MySpace page or YouTube, he would have demonstrated that the big media companies are simply becoming irrelevant. But, whether he knew it or not, what he did was smart. He knew that NBC would whore out the video footage as much as it possibly could since they would have the exclusive and others would inevitably do the job for him of ensuring that the video got on MySpace, YouTube, etc… The reach of his videos was maximized as a result.

Unlike 40 years ago during JFK’s presidency, the media companies a) can’t afford to ignore stories which will garner them attention and b) simply have little to no control over what stories make it to the public. If they don’t cover a story, someone else will. AOL Time Warner realized this a couple years ago and launched TMZ.com. TMZ.com is a hollywood news/gossip site that basically runs stories that AOL Time Warner couldn’t on their mainstream sites. TMZ.com stories often lack the journalistic integrity that a mainstream news organization would want to uphold. AOL Time Warner knew that this segment of news was too much in demand and too lucrative to ignore. And they were right: TMZ.com has been enormously successful and one of the fastest growing blogs on the Web. Moreover, TMZ.com relies heavily on citizen- captured stories, photos and videos and not a dedicated news team. TMZ.com is an example of an old media giant embracing the fact they are losing control of the news rather than trying to combat this fact. There can be little doubt that other media giants will follow suit with sites of their own which embrace citizen media.

A big part of being a trusted news source is providing comprehensive information. Increasingly, this means relying on sources beyond a dedicated news team. Dedicated news teams simply will not be able to scale to meet the volume of news consumption in the future. News sites like TMZ.com, which rely on citizen journalism, can scale and will be a crucial strategy for the big media companies to maintain their significance.

Hmm I know I’ve got some more thoughts on this but enough for now… =)

Google introduces PPA

The big news of the week was that Google released a pay-per-action (PPA) advertising product. This has been hinted to for a while by Google. In fact, during their Q2 ‘06 conference call, I noted several references hinting to a future PPA product. Long-term, Google is definately going to increase advertiser’s confidence in Google’s ad networks with PPA. Most importantly, advertisers concerned about click fraud should be very happy about this. I also liked how Google will be ranking ads by profitability per click. It’s a simple and very clever strategy. The big problem with PPA is that you are relying on the advertiser to effectively convert clicks into actions. If Google deliver clicks to the advertiser but the advertiser does a poor job of converting those clicks, then Google would lose. However, by giving advertisers who deliver a higher rate of profitablity to Google, Google, in effect, forces advertisers to focus on conversion.

This focus on ad profitability will also encourage Google AdSense publishers to get on board with PPA ads. With traditional PPC ads, an AdSense publisher depends on Google to deliver relevant ads that will result in good click-thru ratio (CTR). However, with PPA ads, in order for the publisher to get paid, the publisher also depends on the advertiser to convert the click into action. That might be tough to swallow. Ranking ads by profitability should help AdSense publishers trust PPA ads more.

Reduction in the number of ads on search pages
Scoble posted an interesting tidbit about how he had been noticing that search result pages on Google have been showing fewer ads than before. He got confirmation from an unnamed Google employee that Google has in fact reduced the number of ads displayed.

Google has done a lot of research with users and found that fewer ads mean less revenue SHORT TERM. But long term the advertising revenue actually goes up. Why? They found their users started trusting the advertising more and were more likely to click on ads.

Interesting huh? Scoble points out that this change will help users trust ads more. Ads will be seen by users as aiding in their search, rather than introducing noise. As Scoble also points out, it is conceivable that Google’s top-line will take a small hit as a result. However, if you think about it, all they’ve done is set the relevancy bar higher. Only the more relevant ads are being shown. Less relevant ads are simply being removed from the page. Well, by definition, less relevant ads have low CTR, deliver few clicks, and generate small total revenue. I doubt we’ll see an impact at all.

Google (quietly) introduces text link ads

And now for the bad. Along with the announcement of the PPA ad program, Google also slipped in an introduction to a text link ad unit. Text link ads suck on many levels. First of all, they are confusing to the user. Second of all, they encourage publishers to include certain keywords and phrases that would result in lucrative ads. I’m sure Google will take steps to curb this. Plus, if you think about it, if a publisher sticks in random irrelevant words in their copy, users are unlikely to be clicking and the distraction will discourage users from returning to that site. But the real issue is that up until now, Google’s ads have always been clearly separated from page content. With text link ads, this is no longer the case. Ads can now be intertwined with the page content. A couple forum administrators that have implemented text link ads from other ad networks have since removed them due to poor conversion. It’ll be interesting to see how this plays out for Google…