Over at Mobile Opportunity, Michael Mace writes about the mobile phone taking over the PC:

It’s long been an article of faith for many mobile enthusiasts that
mobile phones are going to become the dominant means by which the human
race deals with the internet.

After quoting some of the voices saying just that, he lists two mistakes he thinks they’ve made:

–They’ve assumed the internet is a thing, and
–They have forgotten about Moore’s law.

He argues that “People do an incredible range of tasks that take advantage of the internet, some of them well suited to a mobile phone and some of them not.” As for Moore’s law, he says let it “continue to chew on the UMPC [ultra-mobile PC], and I think a PC will soon be within the reach of a working-class family in much of the developing world.”

Perhaps my favorite part is his assertion that

The idea that people in the developing world won’t want or need the
benefits of a larger screen and keyboard is patronizing. It assumes
that they’ll be content to be second class citizens for many Internet
services permanently.

The idea that the mobile phone won’t eat the PC doesn’t mean we no longer have to meet the needs of mobile users, it just means we have to continue to meet the needs of PC (and very soon TV) users.

Mace envisions a future of “smartphones with flexible screens and fold-out keyboards that can fulfill all of the functions of a PC.” Before that, I see a future of smartphones that simply plug into a screen and keyboard at home and in the office, eliminating the need for a desktop or laptop.

Share this post:

Alan Jacobson at Brass Tacks Design has offered some advice to newspaper web sites (and by extension, content web sites) on how to make online ads work.  After listing everyone who hates online ads (the list includes, well, everyone), he offers two main suggestions:

• “Change the pricing model from CPM to CPC.”

• “Forget about the user. Focus on the advertiser.”

He believes that to achieve focus on the advertiser a site must:

1) “Make the advertising message the primary visual on each page.”

2) “Limit advertising messages to one per page.”
     2a) Less comprehensive homepages to increase page views
     2b) Stickier sites to increase page views

3) “Serve up ads on a contextually sensitive basis, rather than willy-nilly.”

Jacobson makes some pretty good points here.  I’ve long thought that one ad per page, integrated into the design, would be more effective for both advertiser and reader. The “ad ghetto” that many sites use now results in ineffective ads and readers trained to ignore those sections of the site.  And that includes actual content placed there.  Jacobson’s idea of breaking out of standard ad sizes to create  more emphasis on the ad is good, but runs into trouble when the site is forced to ask advertisers to redesign their ads away from standard IAB sizes. Standards are created for a reason, and it is the very existence of standards that make non-standard ads more effective.

We’d all agree with Contextual ads and increased page views (to help make up for just one ad per page), even if they’re often easier said than done.

Jacobson’s suggestion to move from CPM to CPC pricing is a bit more problematic.  He states that “CPC works for Google. It works for Google’s advertisers. It will work for newspaper Web sites.”  I don’t think that’s an obvious conclusion.  Google adwords get such high click through rates because they appear when a user is actually searching for information or a purchase related to the ad.  Not so on content sites. Yes, a greater emphasis on ads should increase CTRs, but enough? If CPC works for search and it should work for content, does that mean that the only advertising we’ll see online, the soon-to-be dominant medium, is direct response?  That branding ads will die? Just because display ads, as currently designed and implemented have problems, doesn’t mean direct response only is the answer.

I and others have pointed out before that advertisers like CPC ads because they shift complete responsibility for the performance of an ad to the web site.  If an ad doesn’t work because the creative stinks, well, it’s not the advertisers fault, it’s the site that doesn’t work.  Measuring direct response on an ad for a product normally purchased after much research and finding a low CTR? Yup, the site doesn’t work.

I just don’t think the pricing question is as simple as move from CPM to CPC.  There may certainly be a place for CPC ads on content sites, but I’m not sure that place is everywhere.

Share this post:

Just after I wrote about content subscriptions through ISPs, comes this story about the music industry’s latest revenue model.

Perhaps the most prominent service offering unlimited downloads has
been Comes With Music, which was introduced in Britain last fall by Nokia,
the world’s largest maker of cellphones. It lets users download
as many songs as they want, from a catalog of more than five million
tracks, when they buy certain Nokia phones.

[...]

Other services offering unlimited downloads are being introduced by
Internet service providers, which many people in the music industry say
hold the key to curbing piracy because of their direct relationship
with Web users.

The difference between the music industry and the news industry, of course, is that music was never offered for free. 

Share this post:

• Cut costs at least 20% this year and 20% next year
• Continue to raise subscription prices for the print edition
• Explore charging $80-$100 a year for a web subscription

It was #3 that caught my attention. Blodget admits that the notion is “sacrilege” – a perfect term given the religion that’s grown up around free content – and says he’ll defend it in a future post.  I can think of a way to defend it right now – If the content is valuable, people will pay, if it’s not, the Times shouldn’t waste its time putting it out.

The reality is that smaller news organizations may actually have an easier time charging for their content.  The Times is best known for its national and global coverage, news that can be found everywhere online.  The news produced by smaller metro papers though, can’t.  Who else can cover Indianapolis or Atlanta or San Diego the way the local media companies can? 

Way back in the mid-nineties, I thought there was a good chance online content would go the way of the cable network – ISPs would pay content producers to give the ISP’s subscribers access.  This would be how ISPs competed – packages of content for their subs. It sounds quaint now, but who knows, sooner or later everything old is new again.

Share this post:

… but not the entire story.  The good news is LA Times editor Russ Stanton’s declaration that “the paper’s online advertising revenue is now sufficient to cover the Times’s entire editorial payroll, print and online.” The Guardian column provides several caveats, and I’ll assume we need to take Stanton at his word – that the revenue does not also cover the costs of the ad sales and technology staffs. But still, progress.

Share this post:

Knowledge@Wharton has published an article listing several options for news business models.  There’s nothing new here, but it does offer a summary of 5 options:

• The Philanthropic Route – “…in Minneapolis, San Diego and a number of other cities, laid-off newspaper staffers have turned to charitable sources to underwrite
  reporting for new online ventures.”

• The Niche Route – “Waldfogel predicts the online news market will eventually look like the politically polarized newspaper market of a century ago, before
  monopoly status encouraged most publications to seek middle ground.”

• The Pay Route – “The key is a degree of specialization, whether by locality or by
  subject matter, that the traditional general-interest paper didn’t
  deliver.”

• The Participation Route – “‘Newshounds are looking for interactivity,’ [Hrebiniak] says. ‘Whatever gives him or her a chance to say something, to have an opinion, even if 90% of it is self-serving, it works.’”

• The Commercial Route – “Imagine a New York Times book review with a link to Amazon.”

While the “answer,” of course, will not be just one of these, there is one option that is rarely mentioned by the Newnews high priests – the pay route. We’re constantly told that information wants to be free, but then I want to be a professional baseball player (no, I’m not, but he is). The question is, Can it be free? With all of the speculation about the next newspaper to close and the next newspaper to go online only, perhaps we should wonder about the next newspaper to go pay online.

Look, a loss of audience isn’t the news industry’s biggest problem right now, a loss of advertisers is.  An online reader isn’t worth as much to an advertiser as an offline reader (thanks in part to the early online advertising industry’s pitch of their product as direct response), meaning there is a serious question as to whether online advertising can ever support quality newsgathering and analysis. (Assumptions – print is going away and quality newsgathering and analysis doesn’t require as many people as it once did.) We’ve all read about how many page views are needed to make a profit, and yes, we have to get much more innovative about serving advertisers. But until that happens – what? The New York Times obviously feels (or felt) that pay wasn’t the way to go, but they are always a special case (global audience, lots of easily found national and global news, and the paid content was opinion). It would also be interesting to know if their thinking has changed at all.  It’s hard to imagine a pay site working, but is it harder to imagine than an ad site working?

Share this post: