Wednesday, February 25, 2009

The Dismal State Of Online Ad Sales

Online advertising is struggling for the first time in years. After growing at double-digit rates since the beginning of the decade, online ad revenue grew at a barely perceptible .4 percent last quarter (it still grew a total of 18 percent in all of 2008) and market researcher IDC is predicting a 5 percent drop in the first quarter of this year. IDC says that could get worse in the second quarter.

This is distinctly better than the results from conventional advertising. But as Sarah Lacy points out the difference between conventional advertising and online advertising is the difference between an amputation and a broken leg.

So what went wrong?
A lot of things. This is, after all, the worst economic situation on 75 years and it's no news that a lot of people got a lot of things wrong. Compared to, say, bankers, the online advertisers and their evangelists look like geniuses.

That's the good news. The bad news, I think, is a combination of wishful thinking and jumping the gun. Bluntly some of the factors which were supposed to keep online advertising growing aren't in place yet.

For example, online advertisers maintained that online ad results were more measurable and hence a better value than print or electronic ads.

There are two problems with this argument. First, the superiority is more theoretical than practical and second, just because something is self-evidently true doesn't mean that people will act on it.

To take the second point first, the advantages of online advertising over other media haven't sunk in yet with a large fraction of advertisers. They may have heard it, they may even generally agree with it, but they haven't internalized it in a manner that really matters when they have to trim their ad budget.

The first reason is a little simpler – and somewhat more depressing. The theoretical ability to do precise measurements of customer response to online advertising hasn't translated broadly into such measures. Most online advertising measurement is stuck back in the cost per thousand page views era.

As I pointed out in an earlier post in this blog, page views are a poor measure of ad success. They don't reflect the impact of the ad on the viewer and they don't translate directly into reader responses. There are more sophisticated tools available, but most sites don't offer them.

This is compounded by the attempt to get page views at all costs – including turning the potential customer off with irritating ads. It doesn't matter how many page views an ad gets, if it irritates the viewers to the point where they don't want to deal with you, it is not a successful ad.

If online advertising is going to live up to its potential it is going to have to recognize its problems and fix them. It needs a lot more promotion based on success stories and less on “logical” PowerPoint slides. It needs to offer easy-to-use metrics that relate ad spending on line to the bottom line. And it needs more innovative ad strategies designed to produce action and not just page views.

Tuesday, February 24, 2009

The Social Media and the Brain: A Good Thing

In a remarkable display of point missing, some neuroscientists are Viewing With Alarm the entire phenomenon of the social media (and by extension all the new media of the 21st century.

The most recent viewer with alarm is Professor Susan Greenfield, professor of pharmacology at Oxford University and an authority on the brain and its development.

As Prof. Greenfield told the House of Lords (she is also Baroness Greenfield):
“If the young brain is exposed from the outset to a world of fast action and reaction, of instant new screen images flashing up with the press of a key, such rapid interchange might accustom the brain to operate over such timescales.“

She may even be right. And she completely misses what's going on. Dyslexia wasn't a handicap until writing was invented. And what's happening with the new media, especially the social media, is a sea change as profound as the invention of writing.

Thanks to being immersed in a sea of information of all sorts, children are being conditioned to handle multiple data streams at high speeds.

What will our children and their children use this new capacity for? Mostly the same sorts of things we use the ability to read for. Which is to say they will fritter it away on the equivalent of trashy novels and supermarket tabloids.

But some of our descendants will use it for other things too. These capabilities will give them the ability to handle vast amounts of information and (with the help of the appropriate software) to correlate and draw conclusions from it in ways we can hardly imagine. They won't be smarter than we are, but thanks to the enhancements of the media they will have a far greater effective intelligence.

Indeed, the biggest problem with social media and their results is not that the brains of children are being affected, it is that not all children are having their brains so affected.

In another 50 years people who can't handle this datalanche are going to be at a tremendous disadvantage.

Friday, February 20, 2009

And The Practical Effect Is. . .

The Topeka, Kansas, public library has voted to keep minors from accessing five sex manuals, including "The "Joy of Sex".

By a 5-3 vote, the board decided to keep people under 21 away from the manuals, including "The Joy of Sex", "The Joy of Gay Sex", "The Lesbian Kama Sutra" and something called "Sex For Busy People."

Seemingly unnoticed in the ensuing -- and completely predictable -- uproar is the simple fact that the library's action in restricting (some would say "banning") the books has precisely no effect in the Internet age.

Understand, I am opposed to censorship and "The Joy of Sex" -- the only one of the books I am familiar with -- is a book I'd gladly give to a curious 14-year-old. On the other hand, I can understand that most of the minors who check out the book are going to use it as arousing material for solitary sex practice and their parents might object. I also expect that the books would be at the top of the library's "most stolen" list.

However that's immaterial if the purpose is to keep kids away from such material. Most kids no longer get their sex education on street corners. Now they go on line to find out. Which as far as I'm concerned is a very good thing.

Quite simply the rules of the game have changed and public libraries are losing a lot of their importance as sources of information. Things like popular fiction and movies are becoming more important to library patrons and one of the most used features at the public libraries is the bank of computers for patrons to go online.

To their credit librarians are aware of this, but they still haven't figured out how to deal with it.

As someone who spent many happy hours in the public library I'd be sorry to see libraries disappear. I don't think they will though. I expect that like bookstores and so much else in our society they will maintain their name and shift their function under the influence of the new media.

Monday, February 16, 2009

Now It's the Authors' Guild's turn to act silly

Authors are having a lot of trouble adjusting to the new realities of 21st century media. First we had the Science Fiction Writers of America getting their knickers in a twist over unauthorized posting of copyrighted works – and making fools of themselves in the process.
Now it's the turn of the Authors' Guild, an organization ostensibly dedicated to protecting the rights of authors. Their dovecote is all aflutter because of Amazon's new e-book reader, the Kindle 2. The technically aware types at the Authors' have discovered that – horrors! – the Kindle 2 has a built-in speech synthesizer which can read the text of an e-book aloud.
The guild immediately cried foul , claiming this violates the authors' copyrights unless the publish has acquired “performance rights” (i.e. audio books) as well as print rights.
To give you an idea of how stupid this is, consider one simple fact: Text to speech isn't unique to Kindle. Both Windows and Mac machines can read text files and in all probability Linux can as well. In other words, nearly every computer out there is capable of reading a downloaded book. What's more, they have been able to do it for years.
This is truly a piece of multi-dimensional silliness. In addition to the fact that most computers can synthesize speech, there's the simple fact that Kindle, like the other computers, doesn't do a very good job of it. The “speech” sounds like the the Cylons on the original Battlestar Galactica. It's intelligible but painful to listen to in large chunks.
Compared to simply synthesizing speech from text, the problem of producing “real” sounding speech is exponentially more complex. It will take a lot more processing power and a lot of sophisticated software development to lick and that sort of power and sophistication isn't going to show up any time soon in a $300 ebook reader.
There's also the little matter of what constitutes a “performance”. Normally that's understood as reading for an audience, specifically a paying audience of multiple people. Considering that this is feature, to the extent it is used at all, will be used almost exclusively to play text files for the person who owns the Kindle 2.
It's going to be interesting to see if the Authors' Guild will put their money where their mouth is and sue Amazon (and Microsoft, and Apple, and everybody else) over this piece of nonsense. They have sued over such things in the past and in fact won a $125 million settlement from Google over its program to scan books from major libraries. However that case was a lot more clear cut.
What's really going on here is another failure to understand and accept the changes in the media. The fact is that the old media in general – including an awful lot of print authors and their publishers are not merely clueless when it comes to the changes sweeping over us, they're scared to death of them.
This fear comes out in various irrational acts, many of which are silly on their face.
This is unlikely to go anywhere, but if the Authors' Guild decides to pursue it, my advice is to sit back and enjoy the show.