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An inside look at how content payment models and systems are evolving in an era of rapidly changing markets and publishing requirements.
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ContentBloggerTM - Content eCommerce |
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| Tuesday, December 23, 2003 |
Where's Google Going: Year-end Thoughts
Google states its mission as "...to provide access to all the world's information and make it universally useful and accessible".
Some fans and critics are confused by recent moves by Google, and are quick to claim that Google is "selling out" in advance of their highly anticipated IPO. Some question whether Google is pandering to its large advertising clients at the expense of over a hundred thousand smaller Websites that were early AdWords clients. Some think Google is getting distracted by ancillary services such as Froogle and Google News, and not focusing on improving quality of general searches. And, some are perplexed by Google's move to provide searching of book descriptions, especially since that effort has required Google to enter contractual agreements with publishers and enter and host the descriptive data.
Frankly, the book searching move gets me thinking that Google is losing focus. First, book descriptions already exist on Amazon, Barnes and Noble, and many others sites. As ResearchBuzz states: "It doesn't make sense to me that they're bypassing the huge number of valuable, institutional-created, full-text online libraries in favor of going after the same kind of content that Amazon is indexing". Maybe Google was rebuffed by the big online bookstores and decided to go it alone.
Business Model Analogies
To put a perspective on moves by Google, I generally use one of two analogies. The first is Google as TV Guide to Web content. Like the TV Guide, Google as search engine acts as a guide to the variety of programming available on the Web, which increasingly includes content that is behind a firewall.
The second analogy is Google as Yellow Pages. In this model, Google serves as the directory to companies, products, people, stories, research topics, services, images, and any other conceivable object or concept. Like the phone directories, Google as Yellow Pages helps buyers and sellers find each other. The revenue model is similar, too. Advertising by the listed companies accounts for the majority of the revenue stream to most directory publishers.
Google's model is more complex than either of the above due to the variety of content-types on the Web and the sheer number of publishers and users. Still, when it comes to deciding whether Google should venture down a certain path, it can be helpful to think in terms of these two models. With the example of the book descriptions, where Google is essentially publishing new content (okay, republishing content) to be searched, ask yourself if it would make sense for TV Guide to refilm outtakes from programs. Or would it make sense for a Yellow Page publisher to contract with listed companies for sample merchandise to help in promoting the goods. Or, even to buy a company that will be listed in the directory (analogous to creating its own content).
Some people may think that Google should get into the merchandising business and/or the content publishing business. I disagree, and believe that the best way for Google to increase its advertising revenues is to focus on remaining the number one choice for Web searching.
Importance of Community
From the beginning, Google differentiated itself from other search engines because it understood the importance of factoring in the "community" aspect of content. Its PageRank feature for determining the relevance of a Web page takes into account links to that page from other sites. In essence, PageRank is a rudimentary sort of "peer review" or validation from others. By extending the concept and technology of PageRank, Google could improve its ability to distinguish unofficial communities of users and apply that knowledge to further its ability to put content (including ads) in context.
Technology and Design
The simplicity of the Google home page and search box have been its claim to fame. To date, new features haven't contributed to the complexity of a simple search. Rather, they've allowed savvy users to input simple prefixes to limit searches, while the interface remains the same.
VContent
At Shore, we emphasize the importance of combining the right content with appropriate technology and an understanding of the community of users. We use the term vContent to describe this intersection of content, technology, and people (community) where the value of content is maximized. But, if all three elements are required for optimizing the value of content, why I am suggesting that Google stay out of the content publishing business? It's simple; I'm not. Google is in the content publishing business. They publish the search results listings and they publish (or enable the publishing of) advertising content on the largest ad network on the Web. Better yet, they have shown a great facility for combining all three vContent elements to produce extremely valuable content that advances them toward their stated mission. Nonetheless, in closing, I will stand by my statement that Google should stay clear of producing content that goes beyond interpreting digital content that already exists on the Web.
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posted by Janice at
7:23 PM |
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| Friday, December 12, 2003 |
Forecast Bright For Advertising Industry, But Is Online "Advertising" Measured Correctly?
This week concludes two major media conferences held by Investment Banks UBS and CSFB in New York. The top newspaper publishers, such as Dow Jones, NY Times, Media General, Knight-Ridder, all had senior executives present their 2004 outlook to the analysts and media who attended the conferences. Likewise for professional publishers, including McGraw-Hill, Thomson Corp., Reed Elsevier, Wolters Kluwer. Other segments presenting included Entertainment, Broadcasting, Multichannel (e.g., Cablevision, Cox Communications, Comcast (do they all begin with the letter "C"?), and International, a catch-all category that included Reuters, VNU, and Publicis Groupe.
Just a year ago, the 2 year slump in advertising had the entire publishing industry on its heels. Even the minority of publishers that relied least on advertising revenues were hit since their subscribers were feeling the pain of the general economic stagnation. What a difference a year makes! The outlook is now described as "rosy" by Joe Mandese of MediaPost Communications. Even network and cable television advertising, which many pundits predict will suffer permanent declines due to TIVO-type personal video recorders (PVDs) and competition from less-expensive and more measurable media, are forecast to grow 12% in 2004 according to the pre-eminent advertising forecaster, Robert J. Coen, SVP, Director of Forecasting at Universal McCann. Coen’s optimism for the TV segment stems largely from the so-called quadrennial effect—the presidential election and the summer Olympics occur in 2004. Even increases in television advertising from dot.com companies factor into his strong growth estimates for TV.
Coen predicts slightly lower growth rates for Internet advertising (10%) for 2004. But, studies such as the Digital Marketing Dialog Survey which was concluded on December 3, presents some differing data. The study which surveyed 300 global marketers and ad agencies, found that 78% of the respondents plan to allocate up to 5 times more of their marketing budget for online marketing in 2004 vs. 2003 (that is, increase online percentage from 1% to 5%).
However, measurement problems arise when one tries to compare TV ad spending with online advertising spending, since online advertising is increasingly becoming integrated with online marketing campaigns that lead directly to sales and can be tracked and measured. The DMD survey indicates that components of digital marketing are moving away from display ads (new name for banner ads) and toward Web site interactions and content delivery. If online marketing continues to morph into a process for guiding users from a search engine toward a Web site through effective search engine marketing (SEM) and involves structuring the Web site(s) to present information that responds to the questions on the mind of particular users, then the "advertising" component of online campaigns may diminish in importance, that is, if advertising is defined in a traditional manner. For instance, if new-breed SEM companies are capturing the bulk of contextual advertising business for use with search engines and advertising networks like Google, Overture, and LookSmart, and these SEM companies are working with clients to design campaigns that extend from contextual ads and search engine optimization all the way to ultimate online purchase, then it is likely that dollars are being spent on new categories that may not be measured by the traditional advertising forecasters since the dollars aren't paid to advertising agencies per se. Basically, the point is that more dollars may shift to providing relevant information to users on a Web site rather than a display ad on someone else's Web site. As I describe it in my paper, How Publishers Can Profit from Contextual Advertising Models, "meaningful content" becomes "advertising" and "[c]lever advertisers and publishers, with the aid of technology, increasingly will find ways to deliver advertising content that is meaningful to the appropriate audience at the right time." The Web site information may include product specs, lists of local service agents, and other information that doesn't fall into the standard definition of advertising . As a result, Internet advertising may not appear to be growing very fast, but in reality more marketing dollars are being spent on producing an effective campaign that doesn't rely so heavily on advertising.
But, the outlook is still very rosy for advertising agencies that adapt to new digital marketing developments. There is plenty of need for creative rich media content on destination Web sites. Forget intrusive pop-up ads, please! But, how about a streaming video that promotes the key attributes of the product on the manufacturer's Web site? A 360-degree view of a product with the ability to zoom in on any feature? Okay, I'm not a creative-type, but you get the idea. Plus, integrated online and offline campaigns are increasingly popular, so there's an advantage to be had by advertising agencies that hook up with quality Web marketing companies. And, it's safe to predict that there'll be more and more consolidation as large agencies acquire tech-savvy Web marketing firms in order to provide full service offline and online campaigns.
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posted by Janice at
10:08 AM |
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