Traditional media gives way to conversation-based web marketing channels

Corporate Web sites may not push out awesome viewership statistics compared to many media sites, but the data coming out of recent research is pointing to direct communications with online audiences providing multiples more impact on their bottom lines than media-based advertising (here).

Online media companies are likely to have a great year in 2007 but the looming question is how much longer marketers are going to care about Web site advertising in an era when direct conversations between sellers and buyers are pushing traditional media to the sidelines.

The media isn’t dead yet, but if it can’t shoehorn its way into these conversations more effectively it better start thinking about it’s retirement plan.

The environment for online media is looking pretty robust, these days: forecasts for 2007 online ad revenues are looking great and new forms of electronic media production are flourishing everywhere. Brand advertisers are also beginning to embrace the Web more enthusiastically, shifting more of their spend into online channels than ever before. Yet for all of the buzz and bubble over online advertising the greater fact is that media companies are beginning to face the greatest challenge of all: disintermediation.Disintermediation is a word that has challenged publishers before, but it was a less important threat in the early days of the Web. Corporations were content at first to put out “brochureware” Web sites with little meaningful content and user’s interactions were limited to viewing pages and filling out forms for the most part.

But as corporations have learned to create and to sponsor their own engaging content and Web 2.0 technologies have encouraged users to write about and engage corporate content, things have changed quite a bit.

Advertising Age brings this together (registration/subscription) in an article that highlights some interesting statistics surfacing in recent online ratings data. Consumer goods giant Procter & Gamble Co., for example, does not have blockbuster Web sites by media ratings standards - P&G sites captured about 3.3 percent of ComScore’s U.S. October audience ratings - but by comparison this percentage is more than double it’s percentage share of overall U.S. ad spending and nine times its percentage of online ad spend share.

The AdAge article also points to McKinsey & Co. research that showed visitors to one corporate site generating $40 in corporate profit per visitor on average, compared with $5 for audiences reached by traditional media. Not only is going through intermediaries an expensive route through which to acquire customers, but one which doesn’t pay off as well in the end.

While content generated by media companies continues to engage audeinces it’s not clear that advertisers seeking return on their investment are going to follow suit endlessly with major brand-building campaigns. If markets are conversations, as The Cluetrain Manifesto once intimated, then media companies are having a much harder time figuring out why anyone should be chatting with them.

User-generated content is held out oftentimes as a way to help media companies to find a place in the chit-chat between sellers and buyers, but owning a user-generated media property is not synonymous with being able to engage in a conversation. Brand advertising is about seduction: conversations are about relationships. In the meantime the focus on user-generated content leaves fewer dollars to spend on traditional media products - further weakening their potential to appeal to audiences.

Are we witnessing the death of media? Well, yes, in an abstract sense.

There will always be advertising and there will always be companies willing to extend their conversations with their markets through media-based advertising. But if marketing is better served through more direct and focused communications with audiences and through multi-channel advertising wholesalers like Google, then traditional media companies have nowhere to go but down.

The conversations that drive media spends are shifting radically and rapidly and will continue to do so over the next several years. Here are a few ideas as to how media companies can keep abreast of these changes:

• Polish your conversation skills.In spite of the influx of user-generated media services being adapted by media companies most are pretty “hands-off” when it comes to integrating user content with editorial sources. While traditional editorial content is still valuable it’s lack of integration with conversations found in user content is going to compromise its ability to attract premium ad dollars in the long run.If marketing is moving from a command-and-control economic model to a networked model then media needs to adjust its fundamental purpose from being a medium for advertising to being a gatherer of market participants exchanging views. It sounds simple enough, but making a conversational marketing model work in the long run is going to take a lot more skill than slapping banner ads on MySpace pages.
• Move beyond your roots. Advertising at the very dawn of commercial radio was thought of - literally - as a phone booth in a studio which people would rent for a limited time to broadcast a message. Today that phone booth is online and interactive - much to the pleasure of advertisers, but also to the detriment of publishers who still struggle with their role.Media companies can continue to focus on renting out studio phone booths, but it’s a better bet to focus on providing content that marketers can contextualize as they please in their own “phone booths” and in contexts defined by their audiences - and to provide expertise and technology that will allow marketers to extend those conversations into deeper levels of engagement.
• Rethink aggregation. For the vast majority of publishers aggregation is about gaining an edge by bringing together your own content or licensed content into one “walled garden” or another for advertisers or subscribers. But search technologies and services such as social bookmarking, feeds and web mining have make the ideal garden something that is much closer to the needs of individuals and institutions than the ambitions of publishers and aggregators.Marketing value is now maximized when content flows to the contexts that users desire most as efficiently as possible - rather than trying to corral them into contexts not conducive to marketing conversations.

With a near-infinite inventory of content and a finite inventory of advertisers, media companies are in a race with corporate marketers to come up with the most compelling content and context that can get a marketing message across to audiences.

In the long run this is a race that most media companies can only lose. It’s time for media companies to shift permanently to being enablers of effective conversations from all sources.

Today’s “media star” is no longer the one with the least common denominator gazing at them but the one who can get audiences and marketers looking at one another most effectively.

Google set to expand newspaper ad program

For some of the nation’s newspapers, Google’s offer was too good to pass up.

This fall, the search-engine company proposed to show how it could help newspapers sell print advertising to the hundreds of thousands of small merchants who buy Internet ads from Google. Advertisers would go online and bid on the excess ad inventory of daily newspapers, giving them a much-needed revenue boost.

Now, two months into a test with 100 advertisers and 66 newspapers, Google executives say that its pilot program has exceeded their expectations and that they will roll out an expanded version in the coming months. The top five participating newspapers are getting several bids a week from advertisers, the company said.

“The volume [of ads sold] is tripling where we thought it would be,” said Tom Phillips, director of print ads at Google. “I think we’ll have real impact next year” on newspapers’ bottom lines, he said. “We open the medium to a whole new class of advertisers.”

But to hear newspaper executives and analysts tell it, the outlook is more cautious. They said Google has brought in new advertisers, such as small companies outside their distribution areas looking to build more awareness for their products. But Google’s online ad technology is so new that it remains unclear how much it will help newspapers, they said.

Todd Haskell, vice president of business development at the New York Times Co., which is participating, said that the product has the potential to drum up new business from small advertisers but that the Times does not foresee letting go of its direct relationships with its largest advertisers.

“We think it’s a wonderful way to introduce advertisers to the New York Times and print overall,” Haskell said. Once the program gets going, he added, “we’d look to up-sell and migrate those [smaller advertisers] to bigger programs and better positions [in the paper] and move them out of the Google system. And we’ve been very upfront with Google about that.”

Google’s newspaper project is part of its larger effort to transform advertising in traditional media. The company has launched a similar test selling ads on dozens of radio stations across the country. It also has experimented with ad sales for magazines, though after a couple of unsuccessful tries, the company indicated that the program was on the back burner. Google is also interested in selling TV ads.

In some ways, what Google is trying to do is similar to what other ad brokers and agencies have done for years — buy unsold ad space in newspapers and resell it to last-minute buyers. In the newspaper experiment, for example, Google is selling only small display ads — not color or full-page ads, which bring in the most money. In some cases, Google bundles a few small ads into one larger space. There is no indication to the reader that Google helped place the ad.

What differentiates Google is its large network of online advertisers, many of which have never purchased a newspaper ad but will be able to soon with one click. Most newspapers’ ad sales teams have focused on their biggest and highest-paying customers in recent years, and Google’s experience suggests that small advertisers could prove valuable, too, if their volume is high enough.

“Newspapers have priced a lot of small advertisers out of the newspaper,” said John Morton, a newspaper industry analyst. Google’s plan “might be a way to bring them in,” he said. “But it’s early. We just don’t know how much or for sure whether it’s going to work.”

Google’s online system allows advertisers to choose the newspaper and the section, such as Food or Sports or Business, and where they want the ad to run, and then place a bid for that space for a particular day or series of days. The newspaper reviews the bids online and decides which, if any, to accept.

Ed Peterson, executive vice president of sales and marketing for Intelius, a Web company in Bellevue, Wash., said his firm is placing ads through the program and has been pleased with the results. The company, which offers background checks for companies and consumers, has grown its business primarily using online advertising with Google. It sees newspapers as a way to expand further.

“They’ve taken the print world and allowed us to manage it in an Internet way,” Peterson said. His firm is running several ads a week in the Seattle Times, the Chicago Tribune, the San Jose Mercury News and the New York Times. It is planning to run ads in The Washington Post, which also is participating.

The tricky part, he said, is that it has been a little more difficult to gauge the effectiveness of newspaper ads than Internet ads, which invite people to click on them. “The great thing about the online world is you know immediately” how effective your ad is, Peterson said. But since the newspaper ads have run, he said, Intelius’s call volume has gone up and its Web site visitors are buying more frequently. “For us, that points to effectiveness,” he said. “You can do some basic math, and you can point to: ‘I ran this ad in this region on this day, and how do our numbers look?’ — those kinds of things.”

Google’s test concludes at the end of January. After that, participating newspapers and Google will refine the program and decide how to go forward.

Owen Youngman, vice president of development at the Chicago Tribune, said Google’s experiment has brought several new advertisers to his newspaper, although a few other Tribune Co.-owned papers haven’t seen as much activity.

“We’ve been viewing it as a vehicle for small advertisers,” Youngman said, calling it “an interesting research and development project.”

For now, Google is taking no commission for brokering ad sales, though it intends to do so later. Such finer points of how a business relationship might work between newspapers and Google have yet to be worked out.

The participating newspapers and Google “have deferred the complicated negotiations,” Youngman said.

Google’s 2006 top searches

Google’s top searches show what defined 2006

Canadian PressTORONTO — Online social networks, Borat’s American invasion, Paris Hilton, and the definition of promiscuous were among the top subjects that people wanted to learn more about in 2006, according to Google’s annual list of top searches.

Google processes billions of searches each month and calls the results the zeitgeist — a “general intellectual, moral, and cultural climate of an era.”

Bebo and Myspace were the top two searches in 2006, showing the increasing popularity of social networks among young web surfers.

Alexa Internet, which tallies web hits and maintains a list of the most popular sites, says Myspace is the No. 5 site on the Internet — and the top ranked non-search engine — but competitor Bebo at No. 168 was the most popular Google search of the year.

Myspace has become an online hangout for young people to chat with friends and easily post blogs and music, and has also evolved into a marketing tool for celebrities and bands. Bebo is following in that mould and seems to be gaining ground, especially overseas.

The World Cup, which is the most-watched sporting event in the world, drew the third-most search results. With an estimated 5.9 billion viewers worldwide, the soccer tournament’s search numbers easily surpassed those of the Super Bowl, World Series and Olympics.

Surprisingly, video-sharing website YouTube didn’t make Google’s top 10 list, but a similar site, Metacafe, placed at No. 4. One of the site’s gimmicks is to pay users for original content that is viewed more than 20,000 times. The site says Toronto-based stunt team Real Stunts has earned $25,277 for a clip that’s been viewed more than five million times.

Rounding out the top 10 searches were radioblog, a web program that’s used to play music or sound on websites; Wikipedia, the online encyclopedia; the generic term video, which results in about 1.37 billion matches to sort through; Rebelde, a Mexican miniseries soap opera; Mininova, a search engine for downloading music, movies, TV shows and programs; and wiki, a term that refers to a collaborative website that can be edited by many users.

The top Google search term for news articles was Paris Hilton, who made headlines all year for a rift with former “The Simple Life” co-star Nicole Richie, the release of her self-titled debut CD, an arrest for allegedly driving under the influence, and for simply being Paris Hilton.

Orlando Bloom, cancer, podcasting, hurricane Katrina, bankruptcy, Martina Hingis, autism, the 2006 NFL draft and celebrity Big Brother 2006 made up the rest of the top 10 Google News searches.

Google also broke down some common questions posed by web surfers, and more than anyone else, people wanted to know “who is Borat?” The TV and movie character, played by British comedian Sacha Baron Cohen, was the star of the hit comedy “Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan.”

People were also curious about Hezbollah, Capote, Mohammed and Buckethead.

Web users asking for definitions were most curious about the word promiscuous, which perhaps had something to do with the hit song by Canadian songstress Nelly Furtado. Computer terms Ajax and Web 2.0, the acronym ftw, and harlequin were also often asked about, and the other five of the top 10 definition searches were for the Spanish words for administration, philosophy, quality, science and test.

Google users were also more curious about the wedding of Nicole Kidman and Keith Urban than the nuptials of Tom Cruise and Katie Holmes, showed more interest in the divorce of Paul McCartney and Heather Mills McCartney than the breakup of Britney Spears and Kevin Federline, and wanted to know most about the death of Aaron Spelling, followed by Kirby Puckett.

Google doesn’t compile a year in review for Canadian searches, but in November, Ebay was the top search term followed by Myspace, Wikipedia, Mapquest, Britney Spears, games, Nexopia, dictionary, facebook, 411, Runescape, Future Shop, Air Canada, Canadian Tire and video.

Google won’t release its search numbers, but according to Nielsen/NetRatings, it consistently garners just under half of the Internet’s web searches, and in November processed almost 3.1 billion searches — about 100 million a day, or 1,157 a second.

Online ad spending to outpace overall ad market growth

Internet advertising continues to gain on other ad categories.

ZenithOptimedia forecasts that global Internet advertising spending will grow by 28.2% in 2007, at the same time ad spending in other media will grow by only 3.9% — in other words, online ad spending will grow seven times faster.

This disparity speaks volumes about the ongoing seismic shift in the world of advertising. However, the shift to the Internet among US marketers is even more dramatic. eMarketer’s latest ad spending projections were released on Wednesday (see Internet Advertising Will Weather a Sluggish Economy). These put growth in US online ad spending at 18.9% in 2007, within an entire advertising industry set to grow by only 1.4%.

ZenithOptimedia also projects that the Internet’s share of world wide total ad spending will increase from 5.8% in 2006 to 8.6% in 2009.

The researcher’s data show worldwide spending on Internet advertising exceeding the amount spent outdoor advertising this year and surpassing even radio ad spending in 2009.

The analysts at ZenithOptimedia point out that the rise of Internet advertising has been dramatic. In terms of total ad spending, the Internet has overtaken two long-established media: cinema (which it overtook in 1997) and outdoor (which it overtook this year) in the space of only 11 years.

In addition, even in developed markets the Internet receives a much lower share of ad budgets than the amount of time consumers devote to it. ZenithOptimedia describes how, in 2005, consumers in the USA, Japan and the UK (the top three ad markets) spent 21.9% of their media time using the Internet, yet advertisers in those three markets spent only 6.8% of their budgets online.

ZenithOptimedia states: “We expect the Internet to take nearly 9% of global adspend by 2009, but experience from the most developed markets suggests it is heading for well over 10%. The Internet already attracts more than 10% of adspend in three markets (Norway, Sweden and the UK), and by 2009 we expect it to do so in ten markets (Australia, Canada, Israel, Japan, Norway, South Korea, Sweden, Taiwan, the UK and USA). The Internet has its highest share in the UK, where it will attract 13.5% of adspend this year and 21.5% in 2009.”

Looking at the breakdown of online advertising, the researchers found that paid search is the largest single type of Internet advertising, and the gap between search and display ads is widening. However, display includes video ads and other innovations that are exploiting the creative opportunities offered by high-speed broadband, and still has growth potential. Meanwhile, classified continues to migrate from print to online.

For another look into the future, read eMarketer’s US Online Ad Spending: Peak of Plateau? report.

Online ad spending to outpace overall ad market growth

Internet advertising continues to gain on other ad categories.

ZenithOptimedia forecasts that global Internet advertising spending will grow by 28.2% in 2007, at the same time ad spending in other media will grow by only 3.9% — in other words, online ad spending will grow seven times faster.

This disparity speaks volumes about the ongoing seismic shift in the world of advertising. However, the shift to the Internet among US marketers is even more dramatic. eMarketer’s latest ad spending projections were released on Wednesday (see Internet Advertising Will Weather a Sluggish Economy). These put growth in US online ad spending at 18.9% in 2007, within an entire advertising industry set to grow by only 1.4%.

ZenithOptimedia also projects that the Internet’s share of world wide total ad spending will increase from 5.8% in 2006 to 8.6% in 2009.

The researcher’s data show worldwide spending on Internet advertising exceeding the amount spent outdoor advertising this year and surpassing even radio ad spending in 2009.

The analysts at ZenithOptimedia point out that the rise of Internet advertising has been dramatic. In terms of total ad spending, the Internet has overtaken two long-established media: cinema (which it overtook in 1997) and outdoor (which it overtook this year) in the space of only 11 years.

In addition, even in developed markets the Internet receives a much lower share of ad budgets than the amount of time consumers devote to it. ZenithOptimedia describes how, in 2005, consumers in the USA, Japan and the UK (the top three ad markets) spent 21.9% of their media time using the Internet, yet advertisers in those three markets spent only 6.8% of their budgets online.

ZenithOptimedia states: “We expect the Internet to take nearly 9% of global adspend by 2009, but experience from the most developed markets suggests it is heading for well over 10%. The Internet already attracts more than 10% of adspend in three markets (Norway, Sweden and the UK), and by 2009 we expect it to do so in ten markets (Australia, Canada, Israel, Japan, Norway, South Korea, Sweden, Taiwan, the UK and USA). The Internet has its highest share in the UK, where it will attract 13.5% of adspend this year and 21.5% in 2009.”

Looking at the breakdown of online advertising, the researchers found that paid search is the largest single type of Internet advertising, and the gap between search and display ads is widening. However, display includes video ads and other innovations that are exploiting the creative opportunities offered by high-speed broadband, and still has growth potential. Meanwhile, classified continues to migrate from print to online.

For another look into the future, read eMarketer’s US Online Ad Spending: Peak of Plateau? report.

Canadians spend over 45 billion minutes online in September —

Dec. 7, 2006, TORONTO - According to comScore Media Metrix, over 22 million Canadians use the Internet every month. For Canadians, the Internet has become an irreplaceable medium for both business and consumer communication, networking, research and product purchase. In the last year alone, the number of people Online in Canada has grown by 14 percent.

Not surprisingly, advertisers are following the consumer and dedicating more of their advertising budgets to Interactive media. In fact, the IAB has estimated that in 2006, Canadian Online Advertising Revenue will top $800 million dollars.

On behalf of an Interactive industry that is currently enjoying prosperity — but which certainly has seen, and been through rough times — IAB Canada agreed to provide Canada’s National Advertising Benevolent Society (NABS), with $250, for every billion minutes spent Online in the month of September 2006.

Historically, between 37-38 billion minutes have been spent Online by Canadians at this time of the year. IAB Canada is pleased to announce that the actual number for time spent Online by Canadians in September 2006 (one of the three highest months of the year), was a whopping 45,776* billion minutes! As a result, IAB Canada will be writing a cheque for $11,444.00 to NABS.

“This is a good news story for everybody,” says Paula Gignac, President of IAB Canada. “It’s proof again, that the Internet continues to be of paramount importance for all sorts of day-to-day activities, for all sorts of Canadian age groups and consumer cohorts. And, as the 2006 September number is a full 20 percent bigger than 2005 estimates, it’s also proof that consumers’ passion for the medium has not waned, and that the Internet still has loads of untapped potential for advertisers. Finally, we’re extremely happy to tie this growth to a donation to NABS, in order to keep the industry that develops creative for, produces, plans, buys and sells the medium, healthy as well.”

“It’s great to see IAB Canada taking a leadership position by supporting industry colleagues, while highlighting the growing importance of Online advertising,” says Mike Fenton, President and CEO of NABS Canada. “Thanks to all IAB members and the Association, who will be recognized in our ‘Friends of NABS’ donor recognition program for this financial support.”

*Verified by comScore Media Metrix Canada, and represents the time spent for All Canadians in the All Locations Database for Sept. 2006.

Survey: people go to traditional media for breaking news

ClickZ - A LexisNexis survey comparing traditional media to the Web and citizen journalism places user-generated content toward the bottom of the pecking order — at least when it comes to major news events that could affect people’s lives. For more laid back content, such as entertainment news, the Web does better.

The study finds half of consumers turn to network television for breaking urgent news, 42 percent rely on radio, about a third look to local newspapers or cable news outlets, and a quarter use the Internet sites of print and broadcast media. Blogs, Internet user groups and chat rooms are a source of immediate news for only 6 percent of consumers.

As might be expected, the Web ranks higher for entertainment news. Internet sources, and in particular blogs, user groups and chat rooms, exceed radio and magazines as preferred places to go for such content. “Traditional lifestyle media” were named as the most trusted sources of entertainment content.

Asked which sources of news they expect to rely on in the future, 52 percent said they will “primarily” or “mostly” trust traditional news sources over emerging sources, and 35 percent said they expect to confer “equal trust” on both types of news outlets. Thirteen percent said they expect to put more trust in emerging sources.

“It speaks to the point that consumers don’t view the channels the way marketers and media partners use channels,” said Jim Nail, chief strategy and marketing officer at Cymfony, which provides traditional and consumer generated media measurement services. “I thought it was fascinating that blogs and online sources were number two for entertainment. That says a good and reliable source for entertainment news is people like me, and I think if you’d gone back a few years they’d say the traditional media guy.”

LexisNexis surveyed over 1,500 people aged 25 to 64 for the purposes of the study. Respondents, who were divided into “business professional” and “consumer” groups, were asked which news sources they trust to provide information about news that matters most to them.

A new model for getting rich online

Investors Not Needed, Just a Site With Ads

By Yuki Noguchi
Washington Post Staff Writer
Friday, July 28, 2006; A01

For hundreds of thousands of people, the dream of making an Internet fortune works like this: Earn pennies at a time in exchange for allowing Google Inc. or Yahoo Inc. to place advertisements on a personal or small-business Web page.

Take Andrew Leyden, former House Commerce Committee counsel and founder of a dot-com venture that failed, who started PodcastDirectory.com, a search engine for podcasts. As the site’s popularity rose from a hundred hits a month in 2004 to nearly a million now, Leyden started making the equivalent of an entry-level government worker’s salary — $30,000 to $40,000 a year — simply because people clicked on ads. That allowed him to work at home in Chesapeake Beach, Md., trying to make more money by attracting still more traffic to his site.

“I went from literally 26 cents a week or something like that to several dollars an hour,” he said, by using Google’s AdSense software, which solicits bids from marketers who, in turn, pay to run ads on his site. “I get paid while mowing the lawn. I get paid while cleaning the garage. I get paid driving my wife to her office, buying groceries, seeing a movie, playing video games, or just surfing the Internet. That’s really the nice thing about AdSense: No matter what I’m doing, people keep clicking and I keep getting paid.”

A decade ago, the Internet dream was to score through venture-capital financing and by raising cash in public stock offerings. Now, people with creative ideas can get rich relatively quickly by permitting advertisers to piggyback on any Web site that attracts a lot of viewers. Technology can direct ads to more and more specific audiences, rewarding entrepreneurship on the smallest scale — even Web pages filled with obscure and homemade content.

“We have a segment of customers called hopeful hobbyists” who have Web sites devoted to anything they might care about, from crochet to sailing, and who hope to eventually make enough money to quit their day jobs, said Willan Johnson, vice president of Yahoo Publisher Network, which launched a test version of its software last year.

David Miles Jr. and Kato Leonard, two 20-year-olds in Louisville, say they collect $100,000 a month from their year-old site, Freeweblayouts.net, which gives away designs that people can use on MySpace social-networking pages. One couple blogged about their home reconstruction and made money to help pay the mortgage on their new house. Jock Friedly’s business, Storming Media LLC, allows users to download public documents; he used the money his Web site made on ads for new online ventures.

Companies like Google, in turn, also find profit in such sites. In the second quarter, Google got $997 million, or 41 percent of its revenue, through the network of Web sites that host ads through the AdSense system. Its software, like Yahoo’s, prices ads based on popularity. When users click the ads, the software keeps detailed records, including the number of page views and the amount of commission the site’s host earns from the ad — all of which Web site owners can keep track of by logging on to their accounts. Every month, Google pays publishers by check or direct deposit.

Ad publishers must be approved through Google, to ensure that the ads don’t subsidize pornography or gambling, or contain material that is racist, violent or related to illegal drugs. Among other things, Google says it watches to make sure people don’t inflate their revenues by clicking on their own ads — a practice known as “click fraud” that has plagued online marketing.

The popularity of making money this way also has led to creation of “made-for-AdSense” Web pages that contain little content and lots of ads, which critics say clutter the Internet and divert online searches.

The system depends on the cooperation of advertisers, who have to see that their money is well spent, said Jennifer Slegg, an online publisher who is a consultant on AdSense and Yahoo Publisher Network, and who makes roughly half her income from AdSense ads.

“I hear tons of stories about people who were facing bankruptcy but now are able to pay off their houses in full,” she said.

The biggest moneymakers tend to be people who started sites to document their passions. Matther Daimler, 28, developed an obsession with finding the most comfortable seats on the long airline flights he took for business. He would look at a better-situated traveler and think: “He has more legroom. I want that seat next time.”

In 2001, he took to cataloguing on his SeatGuru site all the seats on his usual United Airlines flight, rating them for best legroom, the most recline, access to video and audio entertainment, and proximity to different types of laptop power sources. Soon, at the request of people who read his site, he started taking information on other flights. He now keeps track of seats on 34 airlines.

Daimler and his wife now work full time on SeatGuru, which gets 700,000 visitors a month. About half of the site’s revenue comes through AdSense — $10,000 to $20,000 a month — and the rest comes from ad deals that Daimler makes with companies directly.

Tracking clicks and the money they earn itself has become a passion for Leyden. “In the middle of the night I’ll wonder how much I made,” he said, so he’ll check his page’s status every 15 minutes.

The money that comes in acts like microfinancing for many sites, said Kim Malone, director of AdSense. “We’re enabling creativity, 5 cents at a time.”

Friedly, for example, started his company in Washington in 2001 to make it easier for contractors, scientists and researchers to find, download and purchase public documents. He reluctantly signed up to put ads on the site. “I was skeptical because when you sell something, you want to focus on the product, not refer people to other Web sites,” he said.

But with more than 10,000 hits a day, the income started adding up. “I was surprised by how much we made. It was an excellent supplement to the business, because we didn’t have to do a lot.”

Friedly has since started PatentStorm LLC, a site where businesses can search patent records, without outside investment. “In essence, Google has turned into a venture capital or an angel investor in my business.”

But if Google giveth, it also taketh away, Friedly said. As people put up more sites that compete with his for traffic, the number of hits on his main site has declined.

Rupert Murdoch surprised by MySpace growth

Reuters - Twenty years after Rupert Murdoch upended the status quo in television with the launch of Fox Broadcasting Co., News Corp. is in the vanguard of another media revolution with its recently acquired Internet assets including MySpace.com.

The News Corp. chairman and CEO recently spoke about his company’s interactive expansion and what it augurs for traditional media giants.

THE HOLLYWOOD REPORTER: WHAT HAS SURPRISED YOU THE MOST ABOUT THE MYSPACE EXPERIENCE?

Rupert Murdoch: The speed at which it has grown. It has had no marketing. Not a penny has been spent marketing it before or after the purchase, and it just grows faster and faster every week. Now we’re taking it out to other countries.

THR: DOES MYSPACE OFFER A TEMPLATE THAT CAN BE ADOPTED TO UPGRADE ALL OF YOUR CORE BUSINESSES?

Murdoch: MySpace demonstrated what we felt but now really drives it into us that the world has really changed — that the average person who is computer proficient is self-empowered in their lives in a way they never have before.
THR: HOW COMFORTABLE ARE YOU WITH ALL THAT PHENOMENON THAT COMES WITH IT, FROM PEER-TO-PEER SHARING TO USER-GENERATED CONTENT? MEDIA COMPANIES UNTIL VERY RECENTLY WERE USED TO DICTATING POPULAR CULTURE.

Murdoch: I’m quite comfortable with it. The important thing is that you have to realise it. You have to accommodate and change. We are like other media companies in that we are still reaching for ways to do it. We wouldn’t claim to have all the answers today. The Internet is about giving lots of people lots of choices. Everything we’ve ever done is about giving people choices.

THR: DO YOU THINK THAT WILL BE A CHALLENGE GIVEN WHAT YOU HAVE BEEN UP AGAINST BEFORE?

Murdoch: Probably not. It will be a little bit different in each country. The English-speaking world will be easy. We will have to think about going with a slightly different model or architecture in Japan or Germany or some other countries. It will be driven by exactly the same principles. Young people are the same everywhere. They are curious. They want to take control of things. They want to live in their own world.

THR: ARE YOU SURPRISED THAT THIS MAY BE THE MOST EFFECTIVE PROMOTIONAL AND MARKETING PLATFORM YOU HAVE EVER HAD?

Murdoch: No, but it certainly is a very powerful one. It played a large role in the successful opening of (”X-Men: The Last Stand”). On the other hand, we can’t underestimate what “American Idol” did for it, too.

THR: WHERE DO YOU ENVISION TAKING MYSPACE IN THE U.S. OVER THE NEXT YEAR?

Murdoch: We would have to keep making it a better experience, whether it was instant messaging or voice or what. We’re looking at all the alternatives to make it stickier. There are crazy proponents who contend that it is just a young person’s craze and it will all go away. We’re having to see that it doesn’t. We have to find ways, without destroying its character, of getting more advertising revenue.

THR: DO YOU FORESEE BUILDING A COMMUNITY AROUND MYSPACE THE WAY APPLE’S STEVE JOBS HAS DONE WITH THE IPOD?

Murdoch: Oh, absolutely. There will be a big community around MySpace but also subcommunities within it.

THR: COULD MYSPACE OR WHATEVER YOU BUILD AROUND IT OR ALL OF FOX INTERACTIVE MEDIA BECOME A CORNERSTONE OF YOUR PORTFOLIO RATHER THAN JUST THE LINE FOR “OTHER” ON YOUR LEDGER?

Murdoch: It will be more than just the “other” line. A key cornerstone? It’s too early to say that.

THR: YOU HAVE SAID YOU WILL LIKELY Realise $350 MILLION OF REVENUE FROM INTERACTIVE NEW MEDIA IN THE CALENDAR YEAR. CAN SEE YOU TRIPLING THAT BEFORE THE END OF THE DECADE?

Murdoch: Well, for that we need to take into account search revenues, but certainly there will be those kinds of revenues, one way or another. It might be everything from downloading television series and selling minor items in mini payments. There will certainly be more advertising — more transactional advertising.

THR: ARE YOU CONCERNED THAT MYSPACE MIGHT BECOME A POLITICAL ISSUE IN THE ELECTION YEAR BECAUSE POLITICIANS ARE LOOKING FOR THINGS TO COMMENT ON, AS THEY ARE WATCHING WHERE

YOU THROW YOUR SUPPORT?

Murdoch: I am not throwing my political weight around. I am remaining what I always was. There are concerns not on the political level. Our people have become very good at explaining it and many things about the Internet to politicians. And when a phenomenon like MySpace emerges, it naturally tends to attract more attention.

THR: WHAT PARAMETERS WILL YOU SET FOR PARTNERSHIPS WITH OTHER FIRMS, PARTICULARLY IN THE SEARCH AREA?

Murdoch: Well, we don’t know yet. But if we were to have a search partner, I think we’d look for someone who gives what AOL gets with Google. They can do a lot of the search and sell a lot of the advertising and get a commission of 10% or 15% of the advertising they sell. We’re not at that stage of decision-making yet.

THR: GOOGLE ALSO MADE A $1 BILLION INVESTMENT IN AOL. ARE YOU LOOKING FOR AN EQUITY INVESTMENT AS WELL?

Murdoch: No. They have the chance after two years to put it back to Time Warner at the sale price, so that’s hardly a risk.

THR: IS THERE SOMETHING THAT YOU HAVE DISCOVERED IN OWNING MYSPACE THAT YOU CAN APPLY TO YOUR MORE TRADITIONAL CORE MEDIA BUSINESSES?

Murdoch: Broadcasters will be more successful if they commit more to local, (and if) they do a lot more news, and they do it a lot better. We’ve been at that for more than a year now at our own stations, and we’re getting some movement in the ratings. The future of local stations is very good provided they remain true to their roots, be very local, have their own local Web sites and do all that properly. And if they are aligned to a leading television network, they are going to be in good shape.

THR: HOW DO BROADCASTERS BECOME INTERACTIVE AND ESTABLISH A TWO-WAY LOOP WITH THE CONSUMER THAT IS CRITICAL FOR INTERACTIVE

BROADCASTING AND FEES? IS THE ANSWER FOR FOX WORKING WITH MAJOR CABLE OPERATORS OR WITH DIRECTV SO THAT WHEN YOU HAVE A WIRELESS BROADBAND CONNECTION IN PLACE YOU CAN MAKE YOUR STATIONS MORE INTERACTIVE TO ENGAGE IN ADDRESSABLE ADVERTISING AND ALL THE REST?

Murdoch: Well, once you can hook into a proper broadband service, that’s pretty easy. And that’s what we’re spending a huge amount of time and effort on with DirecTV because we clearly have to have some answer to the cable monopoly.

THR: BUT YOU ACTUALLY HAVE BEEN HAVING DISCUSSIONS WITH DIRECTV ABOUT THIS, CORRECT?

Murdoch: Yes, and we can pull something off. And there is no reason why that shouldn’t link in with everything. I would expect to have wireless broadband advanced in at least two or three cities before the end of this year, and then it might take two or three years to build it out across the entire country.

THR: AND THAT COULD BE DONE THROUGH DIRECTV AND THEN PLAY BACK THROUGH THE ENTIRE COMPANY?

Murdoch: I would hope so.

THR: WHEN DO YOU LINK TOGETHER THESE VERY DIFFERENT SATELLITE OPERATIONS FOR THE GLOBAL LOOP WE ALWAYS EXPECTED OF YOU?

Murdoch: We’ve got to find where they gave common interests because we do have for historical reasons, not of our choosing, a lot of outside shareholders in (BSkyB) and same with Direct. Whereas (with) Star TV and Sky Italia, we’re at 100%. Star satellite has a lot of partners in India that is coming in about a month.

THR: HOW IMPORTANT IS THAT WHEN YOU CAN FINALLY MAKE THAT GLOBAL SATELLITE LOOP?

Murdoch: There should be great advantages that have to do with the ability to buy programs and your ability to develop programs and buying hardware. . . . We’re at a point where DirecTV and Sky Britain and Sky Italia are working together more and more on technical and management issues and sharing techniques and how to cut down churn more than programming … We’re thinking all the time about broadband. Broadband is going to be ubiquitous to the world, and all of our products, to some extent, are about global — with pay-per-view, IPTV or even newspapers. I’m not saying it’s going to wipe out our newspapers. But already there are growing audiences of people. We can argue that many more people read our newspapers today than they did three or four years ago. Some are reading them online.

THR: SO THAT MAY SAVE THE NEWSPAPER INDUSTRY, SO TO SPEAK?

Murdoch: Well, it will take time to change the economics. Classified advertising in newspapers is under violent attack. In other things, not so much so.

THR: CAN YOU ALREADY SEE WHERE YOU ARE MAKING MORE MONEY MORE QUICKLY THAN YOU HAD EXPECTED FROM SOME OF THESE NEW AREAS TO HELP OFFSET WHAT YOU MIGHT BE LOSING IN OTHER AREAS?

Murdoch: Yes. Well, I wouldn’t want to quantify it. But we’re certainly very concentrated on that.

THR: SO YOU’RE NOT CONCERNED SO MUCH ABOUT THE SHIFTING BALANCE OF BUSINESSES?

Murdoch: Yeah, we’re going to ride it and be with it and plan to be on the leading edge of it.

THR: MOST ANALYSTS SAY THEY EXPECT YOU TO USE HALF OF THE CASH YOU HAVE AVAILABLE FOR STOCK BUYBACKS, LIKE THE ONE YOU RECENTLY EXTENDED, AND ACQUISITIONS. IF YOU HAD YOUR DRUTHERS, WHAT WOULD YOU LIKE TO OR NEED TO ACQUIRE TO COMPLETE THE PICTURE? YOU JUST INDICATED YOU DON’T HAVE TO ACQUIRE WIRELESS BROADBAND; YOU CAN ACCOMPLISH WHAT YOU NEED THROUGH PARTNERSHIP.

Murdoch: Yes, but you have to contribute your part of the partnership. We’re talking about a lot of money there. Otherwise, we’ll continue to be opportunistic as before. Great opportunities occur around the world; we’ll act on them.

THR: YOU DON’T SEE YOURSELF MAKING A MAJOR ACQUISITION ANYTIME SOON?

Murdoch: No.

THR: IN THE AREA OF GAMING, YOU HAVE IGN SELLING DOWNLOADS OF GAMES, YOU’RE MAKING A MOVIE FROM MICROSOFT’S XBOX “HALO” GAME, AND YOU HAVE DIRECTV WITH THE VIDEO GAME CHAMPIONSHIPS NEXT YEAR. SO YOU HAVE LITTLE PIECES OF THE GAME INDUSTRY. WHAT IS YOUR OVERARCHING STRATEGY?

Murdoch: We keep looking at the games industry. We know it’s a very big factor in life, but we believe that the available games companies to buy in to are grossly overpriced. We are trying to find another way into it, but we haven’t yet. But I think IGN is certainly a beginning.

THR: BUT YOU ARE NOT TALKING TO ANY POTENTIAL GAMES PARTNERS, SUCH AS SONY OR MICROSOFT?

Murdoch: No, no.

THR: THIS IS A REMARKABLE TIME. YOU HAVE CALLED THIS THE GOLDEN AGE OF MEDIA. WHAT WILL IT EVENTUALLY MEAN TO THE INDUSTRIES YOU ARE IN AND TO YOUR COMPANY?

Murdoch: There are new capital advantages to get things done. You go to these conventions and see all the new technologies being rolled out. But they are all meaningless unless they have content. There is going to be more and more demand for content, and there will be more ways for us to develop more content. And we’ve got to use these platforms to monetise all of our existing content.

THR: DO YOU THINK YOUR NEW FISCAL-YEAR BUDGET CALLS FOR WAYS OF DOING THIS YOU HAVEN’T TRIED BEFORE?

Murdoch: Yes. We will be doing more with mobile telephones — everything from short episodes of television shows to news flashes to ringtones — and we will sell them to all the telephone companies that will take them on a shared-revenue basis. But we will be doing the creativity ourselves.

Reuters/Hollywood Reporter

Web for ‘News’ — Print for ‘Stories’

Telling people news they already know is not a good business model, so, if newspapers are to remain relevant, interpretation is the only way to go in print — especially in the sports department.

By Greg Bowers

COLUMBIA, Mo. (July 20, 2006) — It was 6:30 p.m. on a Saturday. I was talking to my wife on the telephone and trying to figure out how the next morning’s sports section at my paper should look. By all accounts, it had been a big sports day.

Barry Bonds had hit home run No. 714, tying him with Babe Ruth for second place on the all-time list. Even though Major League Baseball had chosen not to commemorate the achievement, it was a big story — possibly made even bigger because of the steroid allegations swirling around Bonds. Love him or hate him, people paid attention when he came to the plate. And, truthfully, it was hard not to, with sports television networks breaking into scheduled coverage for every Bonds at bat.

If that wasn’t enough, there was the heart-breaking story of the Preakness. Barbaro, the Kentucky Derby winner, came up lame in the opening dash of the second race of the Triple Crown. Not only, did the racing industry take a loss instead of what could’ve been the bonanza of the first Triple Crown winner in years, there was the drama that took place right in front of the grandstand in Baltimore.

“A lot going on today,” I said.

“I know,” she said.

“You know?” I said.

“Yeah, Bonds hit No. 714 and Barbaro broke down in the Preakness. It was terrible,” she said.

“You know?” I said.

She knew.

The realization came just seconds later. If my wife, who is not a huge sports fan, already knew the big sports news of the day, then real sports readers, I could assume, knew that and more.

And we wonder why nobody wants to buy newspapers anymore? And if sports readers out there knew that and more, what should I put in the Sunday morning sports section, scheduled to hit their driveways 12 hours from now?

It’s like this: In one dream, I am a magician with dove feathers dropping out of his tuxedo sleeve. The audience is laughing, the trick ruined. In another dream, I am a sports editor breathlessly telling readers what they already know.

They are the same dream.

Sports journalism, actually journalism in general, is in a state of paralysis. Two things that have been constant companions in journalism through the years, have split apart.

The first thing is reporting, getting out the news. The second is telling good stories, interpreting the news. They once went hand in hand — news and writing. Now the first one is out and about before the second one can get its coat off.

Getting information to consumers has become a race. And it’s a race that newspapers, by definition, are losing. Newspapers need production time. Newspapers have to be written, sometimes crafted, and designed. They have to be printed and delivered. Tomorrow morning, once so close, now seems so far away.

And newspapers, once essential, are now low on the information food chain. In sports, this has become particularly problematic. Sports on the Internet, it seems, is second only to pornography. Scores scroll across the bottom of the TV screens on a handful of channels on my cable. I live in Columbia, Missouri , and if there is a night that I go to bed without knowing exactly how my hometown Baltimore Orioles did, it’s because I didn’t try at all.

Gamecasts and MLB-TV are things that students watch while they’re laying out pages here at the Missouri School of Journalism. There is no such thing as not knowing. There’s just not caring.

Even local news, local sports, is covered by local television and radio. The University of Missouri scores are readily available in any number of places on the web.

So again, what do you put in the newspaper?

“So what do you want to know?” I asked my wife.

“I have a lot of questions about Barbaro.”

She wanted to know how often this type of injury happened. What could have caused it? Could it have been prevented? What was the horse’s full prognosis? How many places in the country could deal with an injury of this kind?

So I went back into the newsroom and starting searching for stories. The “news” was already out there. Now I needed “stories.” I needed not only narratives, good storytelling. I also needed depth. Perception. Interpretation. It was the only way to go.

The truth is, newspapers are in a particularly good position to play this new game. They just haven’t realized it yet.

Newspaper staffs continue to be the largest newsgathering organizations in their communities. But they also have another unique feature: They have real writers, writers who can tell the stories, interpret the stories and put the stories into context. They have the columnists who can cajole and entertain.

Sports departments have to do both. Instead of waiting until the next day and dumping all content to the web, sports staffs have to re-purpose.

In other words, now we’ll tell you the news. Tomorrow morning, we’ll tell you the stories.

This will take re-structuring. Perhaps sports departments have to be split in two. One group of tech-savvy reporters whose job it is to get the news out, win the race with cell phone text-casting, webpage shorts, even blogs. Then another group of writers and columnists who will use their extra time wisely, providing the depth and entertainment that bring readers to the next day’s paper.

The same people doing both would split the focus that is required to do either one very well.

Promote the print product with the on-line, immediate product. And, even more importantly, provide exclusive print product: the next-morning stories.

Two products. Each approached in radically different ways. And both valuable to readers. The on-line product is for news. The print product is for stories, depth, interpretation, and narrative.

The problem is larger than sports. A similar scenario played out in entertainment a few days after that Bonds/Barbaro day, when the “American Idol” television show held its finale. An estimate 36.4 million people watched Taylor Hicks become the fifth American Idol.

Some newspapers led the next day’s editions with Hicks. But why? Everyone who wanted to know, and even most who didn’t, already knew. The news was out. Where were the stories?

The reality? Telling people news they already know is not a good business model.

（Greg Bowers (letters@editorandpublisher.com) is an assistant professor of journalism at the University of Missouri-Columbia. He is also the sports editor of the Columbia Missourian, a six-day a week community newspaper managed by professionals with writing, editing and photography by students at the Missouri School of Journalism.）