Posts from — April 2009

Marketing people at FORD as well as many other marketing departments all over the world, directly want to invest in building an audience at least for a concrete campaign. This is a potential growing trend, content not sponsored by brands, but created and promoted by brands directly. In fact, FORD is developing a kind of road movie through a reality show.

The Ford Fiesta has come to play on the American roads.  In the ultimate foreign exchange program, our 100 agents will spend 6 months behind the wheel of their own Fiesta, lifestreaming their experiences, and completing monthly missions to show you what the Fiesta is all about.

Ford will give a free car for 6 months to 100 drivers in exchange of the uploading their driving experiences. Those 100 drivers will compete for getting their stories spread through any social platform.

Fiesta Movement is an attempt of FORD for creating user generated content, getting viral marketing impact, and, why not, checking their own ability to getting positive return on audience. Brands and products want “to be the content”, to be part of the content creation and promotion, and so, advertisers are competing for audience just like any other media.  This campaign may include buying traffic through advertising in other media to increase viral effects.

It is difficult to measure impact in terms of direct ROA for this campaign, but it could be possible to compare the awareness of this campaign compared with others.

Key learnings of this experience remind us some basic principles to maximize returns:

- Reduce content creation costs: They know it may be cheaper to develop a decentralized content generation strategy, not just in content creators/sources but also in platforms.

- Keep a local focus: they select people in different locations across US to be as close as possible to their audience.

- Building engaging contents, with quick and continuous updates, uncertain in their results that may keep audience coming back to them.

- By getting impact in “traditional media” they are also jumping into media without a direct budget for this (I did also “create” contents in my previous working experience, where we intensively used PR).

- Be aware, advertising is not an endless gold mine, “content” businesses need alternative revenue streams to keep independent and sustainable.

In the other hand, while for media companies, as content distribution through social platforms become to some extent a commodity, brands are a growing competitor, for media professionals, it is an opportunity because the business of building profitable audiences will continue to be relevant.

When we talk about online content businesses, we rarely see metrics combining our costs and revenues just in terms of audience. We have ROI as a general metric for measuring a total investment cost against revenues.

Recently, I am hearing more people talking on  ROA: return on audience.  This concept is not yet in wikipedia, and it still has only 17 entries in google, although it was probably an old concept for finance departments or “traditional” media.

Real Media says: “We can segment audiences so that they deliver the most value to you, and give you a return on audience that will make your CFO smile.” You can also find Microsoft using this concept in “Five Ways Publishers Are Increasing Their ROA (Return on Audience)”.

Many may think that ROA adds no value to ROI, but I think otherwise. If we consider ROA, return on audience, as revenues per investment to build an audience (as suggested in this comment) then we get to a complementary metric that considers audience costs as well as revenues. A digital media may not get ROI right now, but having positive ROA shows a healthy future. Even ROA  is just an application of ROI, it is an interesting metric for measuring online media sustainability. We will probably read an increasing number of analysis based in ROA.

A netbook? A tablet PC? Does it matter? asks Sarah Rotman Epps from Forrester. For those doing business right here (media) right now (april 2009) it matters.

Sizing the ereader opportunity, Forrester expects its penetration to begin doubling YoY from 2010 reaching a 4,5% penetration by 2012.  In this presentation there is not much information on how piracy could affect content providers with the spread of these devices. MP3 players are now very popular but music providers are not in a very good situation.

It is a good document to recap the ereader situation and what we can expect to happen in this area.

Where I disagree with this presentation is when inisists in the widely discussed idea of ereaders not being ereaders but PDAs.  For many, in order to be competitive, ereaders need to include a touching screen,  audio and video capabilities, wireless connectivity, etc.

This is not the competitive advantaje of an ereader. An ereader has an approach that we may call: technological austerity. What is important in an ereader is that you don’t need to worry about charging its battery and you can store lots of plain text. No pluggins, no software, no colour, no touching screen, etc. It’s just a way to approach texts in a more static and profound way. And, therefore, that is why personally I cannot see the future of newspapers flooding into ereaders (not totaly, but partially for sure yes), because news are dinamic and constantly changing and updated. Ereaders are, in fact, a response moving backwards to what is important for so many: contents built on words. For contents built on audio or video, no worries, we got other much better devices already.

Most of times, this criticism to ereaders comes from people who are in fact not yet heavy users. I combine my ereader with my pda, then I still have some books, and for some other things I still use my laptop. If my ereader battery couldn’t last weeks (or months), if it got hot, and it was aggresive to my eyes, I would just leave it and use more my PDA. If e-ink can progress into a kind of pda with a different (more efficient) process, then we are just talking on a new PDA generation, but, most experts in e-ink admit that this is, by far, science fiction at the moment. And, if that is the case, why should I have 2 PDAs? In that case, there is no point to develop theory, because ereaders would just be the future of PDAs and so, business side, what we do in PDAs we would do in ereaders; i.e. there would not be a different business case nor such a different product.

There is a clear trend towards convergence also in devices but this is not something we will see in a very short term in terms of e-ink/PDA merge. Making business plans or predictions taking that device convergence for granted is for sure interesting for academic and longer term strategic purposes but is of little value for business managers that need to build up solutions (revenue streams) today. Even more, if such a convergence came after 5 years, we got 5 precious years ahead we couldn’t lose to gain competitive advantage over our competitors. Business leaders in media right now cannot wait to potential convergences in order to make decisions around devices, and so, decisions must be taken with market conditions today: PDAs and ereaders are (today) different products.