AR&D Reinventing Local Media

I post this every year, going back to my time at Lost Remote. It's kind of like how the old holiday classic shows come on every season. This should be on every media site and blog every year at Thanksgiving. It's a wonderful send-up of broadcast promotions, and a warm tribute to that station that exists only in our dreams now – WKRP: Where all the DJs are real people, where they spin the music they choose, where the boss is a pushover and where Loni Anderson takes their messages.

Happy Thanksgiving.

How about some good news for a change? The Interactive Advertising Bureau says that online ad spending grew 11% in Q3 compared to the same quarter of 2007. That's nearly six billion bucks being spent online now. How much is that? It represents the second highest quarter since 2000, according to Editor & Publisher.

Quarterly $ Revenue Growth Comparison – 2000-2008 YTD

Source: PwC/IAB Internet Advertising Revenue Report

Now, that's not the same rocketing growth we've been seeing, but given the economic climate we're in, that's not bad. And the forecast is still for significant growth in online spending next year. Why is Internet advertising holding up while TV and newspaper ads are falling through the floor? For one, advertisers can see the direct results of online advertising's performance. Online advertising gives better metrics, especially when you use ad reporting software that gives smart results.

Advertisers are getting smarter about where their money is going. Local media outlets need to get on top of this and be able to deliver ads that are efficient and are more about the advertisers' needs than the TV station's brand.

Because of the utter panic in the markets, everyone has frozen their money and has stopped investing in media, right? Wrong. The venture capital money is still there, and the VCs are still churning out business plans. Are they just throwing money out the window? Or are they following that time honored maxim: “Buy low, sell high.”

A quick perusal of the excellent website paidContent.org shows us some of the recent investments:

- Digital media browser Boxee gets $4 million in first round of funding

- Social network multiply.com gets $5 million, with option for $4 million more

- Online ad production company DigitalArbor raises $5 million in first round funding

- Discovery to invest $100 million in Oprah network

- Video indexing firm Digitalsmiths gets $12 million in second round

- $2 million goes to fora.tv (which paidContent calls “the C-SPAN of the web”) which has already raised $6 million.

- P2P firm PeerApp brings total amount raised in two rounds to $11 million.

All of these have happened in the past week..

So far this year, only six VC-backed companies have gone public. Compare that to 2007, when 86 did so, and 2000 when 265 went public at the height of the first bubble, writes Michael Malone at ABCNews.com.

For starters, look at what all these companies have in common. They’re video and they’re social. The Web is not dying. It is seeing an end to another bubble. But we’ll live through it. And those who come up with the models that work will do quite well. There’s no reason to stop innovating.

Writes Diane Mermigas at MediaPost:

“At a time when as many as 80% of startups could fail, investing in startups that naturally align with media’s evolving interactive future is imperative. For instance, most of Velocity (Interactive Group)’s 10 investments this year (much of the funding for which comes from large media players) are related to and help advance the state of Web video and advertising over a five-year time frame. The danger for the industry over the next year is that as capital slows, so will innovation.”

Investing and innovating doesn’t stop as the economy slows. Even the VCs who are getting hit right now recognize this. The change in our economy isn’t something you can wait out. It’s something you have to innovate through.

If you needed proof that we are Multi-Tasker nation, here it is: almost one-third of in-home Internet use happens while people are watching TV. That’s one of the findings from The Nielsen TV/Internet Convergence Panel, and the study’s results should challenge our notions about media consumption.

For years, the big myth of “cannibalism” kept TV stations and newspapers from putting breaking news (and finished reports) on their sites. There’s still this superstition that “if we put it on our site, people won’t watch us.” There’s also a fear that putting news on your site will mean the competition will get a leg up on you. Get over it. We’re in the 24/7 news biz now. Unless it’s an investigative piece, they know what’s going on, too.

The cannibalism fear is what drives innovative companies under. It’s why buggy companies didn’t go into the car business. It’s why record companies didn’t get into digital downloads when they should have. And it’s why news has been overrun by the Web.

Sure – the audience is moving. But wouldn’t you rather it moved to you? We have this fear of the Web audience – that they are killing TV. And, obviously, with our entertainment choices spread out, people do spend their time with more “screens.” But this isn’t a zero sum situation. So what are we giving our audiences that makes our content worth watching and checking out online at the same time or later?

It turns out that the Internet audience is the best TV audience. From the report:

- The top fifth of Internet users spend more than 250 minutes per day watching television, compared to 220 minutes of television viewing by people who do not use the Internet at all.

- Teens are the most likely demographic to have simultaneous TV/Internet usage, but Adults 35-54 have the most simultaneous usage minutes.

This is the first time Nielsen has undertaken a study evaluating simultaneous TV and Web usage. One data point does not a trend make. But it does kill a superstition – that we somehow cannibalize from ourselves by having good content online.  

I’ve made my share of boring bar graphs and plain-ol’ pie charts in my day. It’s part of the job. They’re unimaginative, yes, but they get the message across. There are only so many ways to represent visually the data we collect. Or so I thought. Then I came across one of the best graphics I’ve seen that represents how people use on-demand media. It’s not as easy to read as a bar graph. And it’s more of a carnival ride than a corporate boardroom. But it is wonderful.

Wouldn’t you love to get a report that looks like this?

This is from the BBC’s User Experience & Design team. (Via Reportr.net) The group set out to find out how people are using technology right now, as part of its project to launch new online players and services. (Leave it to the British to use humor to explain something serious.)

This was a micro-study rather than a scientific one. The team wanted a snapshot. Adam Hutchinson, the team’s interaction designer writes:

“We asked ten members of the public around the country to take part in our study. They kept “media use” diaries for two weeks and were interviewed in their homes about their entertainment habits. We found that people watch TV or listen to the radio not for its own sake, but in order to achieve a range of goals – such as to relax, to keep up to date or to spend time with each other. This is not new. What we also saw was how these goals are being achieved in ways we didn’t expect.

“By paying attention to the activities that come before and after the watching or listening (like finding, personalising and sharing programmes), we learned a lot about what people find important… Another fascinating insight is how watching TV is an enabler for socialising. Gossiping about plotlines and being up to date with a programme is a form of social currency.”

Start at any place on the chart and follow it around. It’s not linear and it’s challenging – just like the way people consume information. Start in the upper left, for example, with the arched red arrow that says “DAILY ROUTINE.” It goes from AM to PM, and covers the time people spend together and alone. The directions people can go from there include the multitude of social, individual and ambient options for information and entertainment.

The bottom left is all about search and collecting. We search out through metadata (genre, title, date, etc.) put the information through filters (both our own and the Web’s,) find those “golden nuggets” that interest us and decide which to share and keep.

Then we have the options in the lower right: how do we play the information we have found? Do we watch on YouTube? The BBC’s iPlayer (which was the impetus for this study)? Socially? And there is the “triangle of needs”: Immediacy, Constant Availability and On My Own Terms.

No, you won’t find numbers here. That’s because the chart isn’t about numbers. Remember – they asked ten people about their habits. This is about insight and behavior. And it’s dead on. Start anywhere and go anywhere – you’ll be enlightened.

Steve Safran