Archive for October, 2008

Facebook's music plans: Five random thoughts & one prediction

Monday, October 20th, 2008

Facebook is in the news again about its plans for getting into digital music. Namely, the news is that Facebook doesn’t have plans as of yet to enter the digital music business. I posted a story about this today on The Industry Standard called The Facebook Music mess. If you’re interested, give it a read.

Facebook MusicAs I was working on the article, there were five extra things that I wanted to include but didn’t. Here they are:

1) MySpace is going to kick Facebook’s butt in music no matter what Facebook does. MySpace Music, which officially launched in September, has a huge lead on Facebook in the music business. Even before the company’s new music site launched, MySpace already had millions of bands and musicians signed up and using the site as a promotional tool. MySpace’s roots are in music, and this lead is going to be unbeatable for Facebook.

2) It doesn’t matter that Facebook will be #2 in social music. Even though Facebook will not beat MySpace, it will still be in the music business. And Facebook won’t mind being number two because the multi-billion dollar music business is large enough for there to be more than one winner.

3) The suggestion that Mark Zuckerberg is considering getting into music out of jealousy is preposterous. Facebook has millions of registered members and those millions of members want to listen to music. Zuckerberg and crew are going to have to figure out a business model that works for Facebook and its users, end of story. This has nothing to do with jealousy; it’s purely good business sense.

4) Facebook does actually have a chance to beat MySpace – even in music – internationally. I have written about this in the pastFacebook is going to dominate MySpace in the global arena. It’s possible that Facebook may even beat MySpace in music internationally, especially since MySpace hasn’t launched internationally yet.

5) The music labels are going to have to step it up because they are ridiculously behind the times. OK, this might seem unrelated, but really, the record labels are getting more archaic by the second. According to reports, Facebook is having trouble working out licensing deals with the giants. Apparently, the big four labels won’t give up their music libraries without getting an ownership percentage in Facebook first. That’s just ridiculous on so many levels. There will come a day (I think) when the labels realize that having access to Facebook’s enormous, loyal, repeat audience will be worth the trade of their content.

And here’s the prediction: Facebook will get into the music business in 2009 and whatever the company decides to do will involve a partnership with Apple and iTunes.

You must make the move to measurable media today

Thursday, October 16th, 2008

With the economy in the tank, there are a lot of people who are understandably worried about their businesses and their jobs. Companies that rely on marketing for revenue are especially concerned; historically, marketing budgets are among the first to be cut when there is a downturn. In the dotcom bust early this century, the slicing of marketing budgets directly contributed to the demise of several publications, including one that I worked for at the time.

I have said this before, and I will say it again now – if you are a media company that relies on advertising for revenue, you need to start offering a performance-based, ROI-based media option today.

If you don’t believe me, let’s look to someone who knows something about online advertising – Google CEO Eric Schmidt. Google just announced their earnings for the third quarter of 2008, and in the press release, Schmidt said this:

“The measurability and ROI of search-based advertising remain key assets for Google.”

Measurablility and ROI-based marketing programs are what are going to be the key assets to get Google through the hard time. I say, why not follow the leader?

Putting poverty in perspective

Wednesday, October 15th, 2008

Today is Blog Action day, a day when thousands of bloggers all across the world team up to write about one topic in order to bring awareness to that issue. Last year, we wrote about the environment. This year, the topic is poverty.

In all honesty, poverty is a topic that’s tough for me to really grasp. Unlike many of my friends, I haven’t traveled extensively to Third World countries, so I haven’t had to look poverty in the face very often. And when I do, it’s removed – on the TV screen, or via a story that someone is telling me.

I don’t think that many people who live in the United States truly understand poverty the way people in other countries experience it. I am not trying to say that people who live below the poverty line in the U.S. have it easy – that certainly is not the case. But the definition of poverty in other countries is vastly different than what we think of when we consider being poor.

These are two examples that really put things in perspective. Don’t worry – neither one is scary or filled with manipulative images. They are both just meant to give you an idea of where you fall in the midst of the world population.

Global Rich List – this site will show you how rich you really are when compared to everyone else in the world. Just type in your income, and you’ll find out if you’re richer than you think.

The video embedded below is short – just one minute – but will give you another good look at where you would fit in if there was an island that was cross-section of the world divided by income level.

After checking out these resources, you might feel like you have a little bit more to give. If so, I would like to ask you to join me today in making a donation to your favorite charity that fights poverty. If you don’t have a charity in mind already, World Vision is an excellent organization that makes good use of every dollar donated.

And, if you have a blog, it’s still not too late to sign up to be part of Blog Action Day.

Entrepreneurs in a downturn

Monday, October 13th, 2008

Fresno BeeThe Fresno Bee, a newspaper in Fresno, Calif., recently featured this article about entrepreneurs in an economic downturn. The entrepreneurs interviewed were generally optimistic – one of the most important qualities of anyone who starts a company. I’m also interviewed in the article, so check it out if you have a minute.

Entreprenuers see upside in downturn: Many Valley small-business founders see the economic slump as opportunity knocking.

The markets are down (again) so let’s talk about marketing instead

Wednesday, October 8th, 2008

My latest article has just been posted on The Industry StandardFive ways media companies can take advantage of the shift to performance-based media.

New dollar billWith the markets down 30% year-to-date and nations around the world joining the U.S. in an economic downward spiral, it might feel like anything related to the economy or spending money is bad news. But there are bright sides to any situation if you look at it from a different perspective, and this situation is no exception.

When the economy dips, and companies take a hit, one of their first budgets to be cut is often the marketing budget. Marketing can feel like unnecessary spending for businesses, and it’s easy to cut one month and then quickly pick up the next month again when the company is doing better.

During the dotcom bust of the early 2000’s, I was working for Publish magazine, a trade magazine/Website focused on “Internet communication.” That magazine, like many others (including The industry Standard) folded due to the bad economy and the cut that IT companies were making to their marketing budgets.

But those were the days before performance-based media. Google, the leader (and pioneer) of PPC and performance-based advertising, launched its AdSense program in October 2000, but it didn’t gain traction until 2002. At that time, marketing budgets were easy to cut because marketing execs couldn’t prove ROI on the money they were spending. But today, when $1 out is easily measured to x dollars back, I believe that companies that provide performance-based advertising options will be insulated (a bit) from the downturn.

This isn’t to say that companies will be entirely shielded. But when some amount of revenue is easily tied back to a smaller amount of spending, companies will not be inclined to cut that spending.

Dollar bill by reubenaingber

Americans expect companies to have a presence in social media: Too bad, Americans

Tuesday, October 7th, 2008

I just saw this press release from Cone LLC touting some results of a survey they did about companies and their presence on social media sites. According to the survey:

– 60% of Americans interact with companies on a social media Web site.
– 25% interact more than once per week.
– 56% of American consumers feel a stronger connection with and better served by companies when they can interact with them in a social media environment.

Confusing statsThese results are actually shocking to me, primarily because I have a hard time believing that 56% of Americans have interacted with a company using social media. I’m not sure how Cone is defining “social media” – perhaps their definition is broader than the one that I would give the term. But I really can’t believe that many companies are up and active and using social media effectively enough to have interacted with their customers using that medium.

I have heard the examples (as you have) about Comcast and Zappos using Twitter. I know that many consumer facing sites are using Facebook and MySpace. But are this many businesses really using social media enough to be communicating with their customers that way?

Apparently I’m not the only one who is perplexed by these figures. This blog post by Steven Hodson at WinExtra says it better than I would, so please link over and read his post if you’re skeptical about the numbers, too.

But taking the study at its word, this is really bad news for businesses that aren’t using social media. Those slackers better catch on immediately. According to the study, 93% of Americans believe that a company should have a presence in social media.

Photo by aeu04117

Long live the media brand

Thursday, October 2nd, 2008

I just posted my latest article on The Industry StandardWhat The New York Times, The Wall Street Journal and CNN are doing wrong.

It has already been well-documented that online media is eating away at print revenue. Take The New York Times for example. According to Scott Karp, from “May 2006 to May 2007, print ad revenue for the News Media Group decline $19.2 million or 14.4%, dwarfing the $2.8 million increase in online ad revenue.”

Broadcast revenue is also on the decline. According to Nielsen Media Research, although National Cable TV and Spanish-Language TV were up slightly, Network TV and Spot TV Markets were down significantly in 2007.

The good news for print and TV is that they’ve moved to the Web. Now they just have to figure out how to do it right.

Print and television brands are some of the most well-known in the world. Just think of the names – The New York Times. CNN. The Washington Post. NBC. It would be difficult to find someone who doesn’t recognize at least one of those companies. And the audiences have followed the brands online. According to the data (see chart, below), many mainstream print and TV outlets have huge – and growing – online audiences.

Compete data for print media sites online

In my opinion, building an audience is the biggest challenge to overcome online. The second is producing content that anyone cares about. So these companies are more than half-way there. If they can just get their business models figured out, they just might have a shot at not only surviving, but thriving.

Text messaging on the rise

Wednesday, October 1st, 2008

According to a story from the NY Times this week, in the last quarter of 2007, cell phone subscribers sent text messages more than they used their cell phones to make a call. The story points to a couple of factors leading to the increased texting rate, including QWERTY-style keypads (which make it easier to send text messages), and cell phone packages that bundle texting or offer unlimited texting plans.

While I’m sure that those things are factors, there are two other considerations that I think are at least equally important.

First, there is a stat in the story that is unbelievable (emphasis mine):

Teenagers ages 13 to 17 are by far the most prolific texters, sending or receiving 1,742 messages a month, according to Nielsen Mobile. By contrast, 18-to-24-year-olds average 790 messages.

Call me crazy, but I would have to guess that the unbelievably high number of text messages sent by teenagers is bumping up the stats. Chris thinks that I send a lot of text messages, but when I got rid of my phone last night – which I had for two years – I had only sent 900 text messages EVER. Since the average number of text messages sent per month is 357, according to the study, there are plenty of people who are still sending no text messages, and who are calling a lot more than texting. It’s these young-folk that are bumping up the numbers. That doesn’t make the numbers less true, but it seems worth mentioning.

Secondly, I think cell phone styles are really contributing to the increase in texting. As I mentioned, I got a new cell phone last night. Previously, I had a RAZR, and was really happy with it. This is the new phone that I bought (it’s an LG enV2):

 LG enV2 front

 LG env2 open

This phone is so easy – and fun – to text on, that I have sent way more text messages in the past two days than I did in the previous month. It’s not only the QWERTY keypad that’s contributing to ease-of-use; it’s also the flip phone keypads, which often are marketed to, and appeal to, young people.

As more and more text services like Cha Cha hit the market, and as the older generations join the texting fray, get ready to see these numbers climb even higher.