Thursday, July 09, 2015
As a freelance media director for an ad agency I have been pitched ad networks, behavioural ads and native advertising concepts. As part of the due diligence in any media plan, I look at the ability to deliver to the target market, based on the person’s profile, location, timing and purchasing influence that the person has on the company’s products that I am advertising. The objective is the right person at the right time with the right message.

To illustrate this point, you don’t advertise weed killer products in December during the winter; it is the wrong time as spring would be a better time as lawns start to grow again.

Like the gambler that tries to create a computer program to pick the winner of a horse race, humankind has always tried to find a way to beat the system using technology combined with a creative idea. Math has always provided a sense of certainty in decision-making and it is hopeful that it will lead to the right answer. This human instinct has created innovation that enriches the lives of us all. The perceived pot of gold at the end of the rainbow in advertising is to create an algorithm that will predict when a person is going to buy your product, based on  delivering the right person at the right time with the right message – a form of artificial intelligence.

 
While science has tried to create a mathematical model on the art of advertising, I am cautious on the expectations and failure rate on these new models. For example, weather models are not 100% correct and can be wrong up to 40% of the time due to unpredictable ecosystem fluctuations, just like markets. Compounding this failure rate is the growing evidence of bots accounting for 50% of web traffic, which make online media buying more complex than traditional media. With this market scenario for online media some concepts have emerged to increase the success rate.

Using past online behaviour of web content consumed as an indicator of future buying intentions is the premise of this approach. In the tech world this approach has advanced the science to the next level, but the algorithm is only as good as the inputs in the modelling. Previous habits are just one source and cannot effectively predict a person’s buying intentions. To illustrate this point I had a colleague chat with a friend about a book on Facebook, she soon started receiving ads about the book to buy, but what the algorithm did not know she already owned the book.

 

But to get that information requires that the person agrees to be tracked and this has opened a can of worms for privacy laws. The major online ad companies like Google require that you login each time when they use their web browser so they can track your habits. Google has asked their users (optional) to provide a demographic profile and provide info on what ads they would like to see to address this issue for example.

They have determined that I am male 45-54 based on my website viewing habits and I am in the ad industry, which is correct but a little creepy as they are big brother watching you. If this model were used in a shopping mall where a store can follow you around the mall and provide you with a sales pitch based on stores visited, it would be in my opinion unethical and in some countries in Europe, illegal. Based on this logic I am not a big fan of behavioural advertising, as I do not want my client’s brand being associated with this unethical or illegal behaviour.

In April 2015, research by the Canadian Marketing Association found that 33% of Canadians are comfortable with behavioural advertising if the advertiser is transparent about it and gives them a chance to opt out. But 67% are not comfortable with it, and suggests that you can alienate 67% of your target audience with this approach. The companies that offer this service the ad networks have banded together to create a Digital Advertising Alliance that will provide this transparency through a program called Ad Choices that enable people to opt out, but a person must click on a very small icon to opt-out. This is a form of negative option marketing another unethical practice in my books, so this is just a smoke screen to look transparent instead of asking people upfront.

The number one thing advertisers have always wanted is an article on their company as this form communication provides 3rd party creditability to the brand. This fact is the basis of a concept call Native Advertising and is based on the principle that a sponsored article/advertorial that looks like other articles on a web site instead of an ad will work better for the advertiser. In my opinion this is a farticle (fake article) disguised as editorial called sponsored content. Lessons learned from publishers I have worked with in the past showed that these promotional articles have low credibility and are not read by readers and need to be edited by editorial before being posted to keep their trust with the brand. So how is this going to help sell product by trying to fool the reader where the lines between church and state are blurred. I surf news websites where this line is blurred, as you cannot tell the difference sometimes.

My feeling is native advertising is a concept born out of ignorance in the tech industry by somebody with no publishing or advertising experience and because it is, digital publishers are led to believe that it will work better than other methods of advertising. The assumption made by the tech community is that readers will believe these articles and I feel this isn't true. Some desperate publishers who are looking to increase online ad revenue think they will get a competitive advantage for ad dollars with this approach. I have discussed this idea with some of the publishers I work with and we decided against it, as it will hurt the brand in the long run - ie: church vs. state editorial issues.

When I wear my media buyer’s hat I want to stay away from this, as I do not want to insult my target market with a “fool the reader” approach. You need to be transparent and honest with your target market and native advertising does not meet this requirement. I would rather have an ad mixed in with editorial that reflects the needs of my target market, just like checking the editorial schedule of a magazine to plan ad insertions.

For example, If I want to reach men that like fishing, I would advertise in a magazine like Ontario Out of Doors or Outdoor Canada, versus creating a sponsored article on fishing and advertise it in an ad network. Let the content experts write the article, I just want my ad beside it.  The overconfidence of the tech community in this situation can be compared to a successful baseball coach taking his baseball techniques and becoming a hockey coach. Realistically,  the techniques will not work as the game and rules are different.
Friday, June 19, 2015
One of the challenges facing the media industry is converting free web readers to a paid one. This is a near impossible task if you start out giving it away for free. Some have tried and failed and went back to free. In the early years of the Internet it had to be free to get a trial so it was good strategy at that time. But, if you give it away for free the writer suffers in this industry model, as there is less money to pay them.

Companies like Google have benefited from this access to this free content for their search engines and Ad Sense program. This causes publishers to pay less for this content to make ends meet. I call this a “wage theft” strategy on an industry level that has broken the system. Writers use to get paid $1 per word in print, now if the're lucky, they get 10 cents per word. So who is going to write all this content? Writers are now forced to live on lower fees for their work and some even work for free, just for the exposure, and the hope that it might lead to some paid gigs.

 

As publishers we need to look for ways to make the content pay so we can pay a living wage to our writers. While web display ads is one way, it cannot be the only way. For example if a website that has 50,000 visitors and is generating say 200,000 page impressions, the potential value is $3,000 per ad spot based on a $15 CPM if they can get it. So if you have three ad spots the value of the inventory is $9,000 per month or $108,000 per year. Assume that 50% of the inventory will be sold and the revenue is $54,000.

But the reality of this scenario of getting a $15 CPM will be a challenge in the consumer space. The Google ad sense program pays by the click model so that publishers get a very small CPM for their ad impressions. Ad networks take a 40% commission on ad sales and sell inventory at $3-5 CPM. For a publisher that only has a website they will be out of business if they do not have other sources of revenue like a print version or email newsletter to sell to amortize content costs.

In this market scenario Google gets our content for free for the Search Engine advertising and then undercuts publishers with low rates with the Ad Sense program to get all the advertising dollars and depress rates. This system is broken as you can see. One side provides the content for free and the other gets all money. Nobody will want to be a writer under these conditions and the system will collapse in the long term as their will be no next generation of writers.

To get some ideas on how to fix the system I had an interview with Ryan Wilock. Wilock is a content creator in the radio industry, who is also a syndicated DJ with a hit show distributed nationally on radio stations across Canada with the same music format. He gets a fee based on the ad sales of his program. This model links the success of the content to ad sales and the creator gets to share in the proceeds. That is a true partnership, not what we have in the online world! Now if we can get publishers to do that  it would be great start, but there has to be sufficient ad sales to make this work profitably.

 

Another interesting idea I found was a company Legacy.com that is an obituary service for daily newspapers that provides an online announcement, a chance to leave comments to pay your respects and register in a guestbook as part of the service. The newspapers pay a fee for each listing, but can reap the rewards of related sales of flowers that the visitor can purchase while visiting the obituary. Legacy provides a flower ecommerce service where a share of the proceeds will go back to the publisher. Over 1,700 newspapers use this service. In this model the advertiser pays for the listing and then the publisher get a cut of the sales of the products too. This is a great model as it provides two sources of revenue for the content.

 

There is another approach to look at that does a great job using the content marketing model. Dr. Mercola has a website that provides articles on natural health and living and has over 1 million subscribers to their email newsletter. The branded media site takes no advertising and pitches no products but their own branded ones that are available for sale on the site. This approach, like the Leagacy.com idea links the content with actual product sales versus leads and awareness for advertisers.

The new media companies like search engines; social media and blogging sites rely on free content for them to make their profits. It is a model that does not benefit all the stakeholders in the ecosystem and must be addressed by the industry for long-tern sustainability. In a world where content is “King” we need a better support system for writers so they can share the benefits in the growing share of digital advertising. How about this radical idea that all the search engines give back 25% of sales to a journalists fund through a country tax that is distributed by the government to the industry as grants. The search engines must comply or each country web filters through the ISP providers will block them from market access. Now lets see if any politicians or the CRTC take the ball on this one.
Wednesday, May 20, 2015
The benchmarks for digital excellence for the Canadian media industry are set each year with the Canadian Online Publishing Awards. The call for entries began May 4 with a deadline of July 6. The Early bird deadline is June 1. 

We have made some adjustments to the categories this year that includes a “Best Editorial Packaging” award for publishers that meet the highest journalistic standards in the multiplatform digital world. The COPA awards party is schedule for Thursday, November 19, 2015 at the Phoenix Concert Theatre in Toronto.

 

COPA RULES
The big winner in 2014 was St. Joseph Media who hauled in 11 medals (6 gold and 5 silver). In second, was IT World Canada with 7 medals (5 Gold and 2 Silver) and a tie for third with 5 awards was Rogers Media and TC Media  (2 Gold and 3 Silver each).

The Best of Canada Digital Solution award went to Cottage Life for their “How to buy a Cottage” Apple app. The Best of Canada Digital Content of the year went to the Globe and Mail for their interactive story “No Safe Use” on the hazards of asbestos. The Best Online Ad Campaign of the year in Canada went to Toronto Life for their sponsored content program for Evolve Fitness

2015 WINNERS
As the producer of the COPAs, I am often asked what does it take to win a COPA and how can a small publisher compete with the big guys with the big budgets. To answer the first question I have provided some info below on the guidelines the judges use and the judging process.

To answer the second question we have created an award for the independent publisher. This is a Best of Canada award from all the entries submitted from companies with 20 full time employees or less. Reader’s Digest is the sponsor of the Best in Canada Awards category.

COPA ENTRY JUDGING TIP
Each judging panel for each award has 3 judges with an expertise in one of the following areas - journalism, design, digital, publishing, marketing and media. The judge’s mix in each panel is dependent on the category and each judge gives a score out of 100. The judges are asked to use the criteria below as a general guideline during the judging process - artistic style, compelling content, marketing benefits, reader interaction and technical execution. The judges can still use their own criteria for the final score.

JUDGES GENERAL GUIDELINES

A: Artistic Style: layout and design, typography, colour, photography, illustration, multimedia

B: Compelling Content: grammar, writing quality, content, freshness, reader engagement

C: Marketing Benefits: audience deliverables, brand personality, consumer response, reader stickiness, brand environment

D: Reader Interaction: functionality, navigation, SEO efficiency, Interactivity

E: Technical Execution: muliti-platform execution, download speeds, ease of use, technology foward vs. reader learning curve, click fatigue rating

You can also get some great advice from the comments from COPA judges at this link.

THE COPA ENTRY FORM CAN BE FOUND HERE.

Thursday, April 23, 2015

It is hard to fathom that Microsoft is now an underdog in the consumer heavy weight technology division with Google, Apple, Sony and Samsung as other contenders for the title. But times change.

Technology companies in their search for growth to meet stock market expectations have expanded into different industries to generate new revenue streams. They have become conglomerates like GE in their business strategy. GE makes appliances, lighting for homes and business, provides healthcare technology and a financial division called GE capital to finance projects. GE’s mission statement is that they are a company that offers the latest technology and research to build, power, move and cure the world. Quite a transformation from humble beginnings from a company that stated making appliances for the home.

Apple is using this conglomerate playbook for example as they are planning to enter the medical, financial and automotive markets. They are already in the entertainment, music, software, hardware and telco markets. Google has entered the crowded hardware market with some success with their Android Nexus tablet, Chromebook laptops and plan to provide 4G wireless internet in the USA.  Microsoft is no different and they have entered the hardware market with the Surface tablet/laptop product line.

Microsoft Surface Pro 3
So lets see how Microsoft has done with their entry into the computer hardware market with their Surface Line of laptop/tablet hybrids that they are promoting. This is the third generation of Microsoft Surface devices and they keep on getting better with each generation as we will see. It looks like the deep pockets of Microsoft are finally paying off with the latest crop that is coming this May.

 

What I liked about it was the 12-inch screen as it can accommodate 8 ½ x 11 pdf documents to read without shrinking, I found this a big plus versus the 10-inch tablets that shrink the document to read. Somebody finally created a tablet based on a letter size paper. I can now enjoy my morning coffee on the patio, as the screen is set-up to read in natural sunlight, so I can truly have backyard mobile technology. Other devices sometimes do not work in natural sunlight that makes it tough to use outside. The machine was also fast with the Intel 1.5 Ghz processor to power the device, as we all know faster is always better when surfing the web.

As a work device you can work in desktop mode when you were in a mood to use it as a laptop. Like any laptop it has USB port to delete transfer of documents using a thumb drive plus a micro SD card port so you can transfer your photos. The detachable keyboard uses magnets to attach and is easily separated or attached when needed and comes in 5 colours to choose from. The screen has an easel stand that flips out as needed to make keeping it upright on a table or your lap while you are in bed. The Surface Pro 3 comes with a Bluetooth pen which will enable you write on documents, which is a time saver versus the old method of printing, signing and scanning.

The device did feel warm on the hands when holding it in tablet mode (Intel processors have a tendency to give off heat when in operation), which is a negative in my opinion. The price at $799 will not have a mass market appeal, but this was the Pro Model with extra features. But wait next year’s version is always better and starting in May you can buy the Surface 3 that will have a smaller screen (10.8”) and a lower price (starting from ($499) to position the device for mass market appeal.  To lower the price the pen that was included in the Surface Pro 3 version is now optional and the RAM is only 2GB vs. 4GB in the PRO model.  But the Intel processor is 1.6GHZ, so it is a little faster in its latest release. So If I was a betting man the latest version is good value at $499 and I would consider buying it vs. the Pro model that is $300 more.

Rating: 4 out of 5


The device would have gotten higher marks, but it was warm to the hands when holding it in tablet mode. It would have gotten a lower score with a price point of $799 (as you can buy a $300 laptop at the Microsoft store, plus a tablet for the same price), but the Surface 3 that is coming in May helped raise the score higher with a lower price point of $499. Ryan Winsborrow from Nerds4Hire who also looked at the device says this is a solid machine on par with any hardware built by other manufacturers, but does not break away from the pack with any sizzle. Microsoft is also releasing a new smartphone the 5” Lumina 640 that I will be getting soon to replace the 4” Nokia 920 I am using, that was used to shoot the photo for this blog posting.

But this conglomerate strategy does come with risks, just ask the folks at Blackberry as they lost the battle in the consumer smartphone market that they invented and is now reinventing themselves as they move forward. Expansion into new markets is always risky that are not part of your core strengths as a company, but it can be done, just look at how GE has survived and prospered. Some of these tech companies are now trying to build an automated driverless car, but when the first one crashes due to a software glitch (that will happen) it will not pass the road safety test, so these ventures are not always a guaranteed success.
Thursday, March 12, 2015
I am amazed at all the childish behaviour of social media companies. It seems that the rules of good conduct does not apply to this supposedly superior medium versus traditional media.

I beg to differ, as I believe that social media is like that child that never grows up and acts like a spoiled little brat, but nobody has the guts to discipline them, as they will cry child abuse, well I do!

The recent social media scandals include a professional hockey player’s wife, who is demeaned on a micro-blogging site and then the defamatory quote is broadcast on a national TV sports station, and only through a threat to sue was any action made to ensure that the person’s reputation remained intact.

Then there is the sex scandal at a university, where a bunch of students started a social media group that demeaned women. What is a person to do to protect their loved ones from this online behaviour?

If these acts were done by a traditional media brand by one of their journalists there would be more of an uproar than what you have seen with these two scandals. They would be out of business and every politician in the world would be demanding justice, plus plenty of lawsuits.

This illustrates the double standard with social media, they claim to be media, but are not responsible for the content that they distribute. I believe that they should be held liable, as they should be treated like a traditional media publisher. Like the boy that cried wolf, they cry “Freedom of Speech,” as their calling card.
 

This issue is going through the courts and a precedent has been set based on the case of Baglow vs. Smith that is chronicled on the Canadian Tech Law Blog published by McCarthy Tétrault LLP, one of the top legal firms in Canada. Roland Hung wrote a posting titled “Defamation in the Blogosphere.”

The plaintiff in this case is Dr. Baglow, the owner and operator of an Internet blog site known as “Dawg’s Blawg” that posts left wing opinions and commentary on political and public interest issues. The defendants, Mark and Connie Fournier, moderate a message board on the internet called “Free Dominion,” a venue for the expression of conservative views.

On August 10, 2010 Roger Smith (the other defendant) posted a comment on this message board under the pseudonym Peter O’ Donnell that referred to the plaintiff, Dr. Baglow, as a supporter of the Taliban, a terrorist organization. Dr. Baglow objected to this comment as being defamatory and requested the Foruniers remove it from Free Dominion, which they refused to do.

Initially, the defendants won the first round based on their legal defense of “Fair Comment.” This was appealed and a judge ruled for a new trial. The key point of law in the case is, do the same rules apply to the Internet as they apply to traditional media.  

The defendants argued that their message board cannot be considered a publisher and the technology used was a neutral platform and the lawsuit was an unconstitutional violation of the guarantee of freedom of expression. They claimed they were not liable for the postings of hundreds of people on their site. Simply put, they claimed that as a provider of an interactive computer service they should not be liable for user-generated content from third parties.

Madame Justice Polowin disagreed with the Foruniers that a message board or forum is set up to provide content to their reader and both defendants the publisher and writer is jointly liable for defamation.

While the decision was favourable to the plaintiff, the courts are not clear how this will apply to social media, where at least hundreds of thousands of comments are posted each day and if the moderators are responsible for these. In other words new law is being created to address the issue, if social media should be treated like any distributor of content and be treated like a traditional publisher. In my opinion the answer is yes.

While defamation is a civil matter there are criminal acts being done on social media that should get swifter action by the courts as the police can charge somebody versus waiting for somebody to sue. The use of social media to recruit terrorists must be considered a hate crime as it supports the elimination of another race based on their religious views.  

Social media micro blogging sites are also a place where terrorist propaganda is broadcast to the world and must be stopped. Again, social media will cry ” Freedom of Speech” or “Censorship” as their wolf cry, as they are not liable for what people post on their site even though it is a hate crime.

I had a chat with a retired division commander of the Toronto Police, Paul Gottschalk, who was in charge of the cyber crime division and this is what he had to say on this issue.

In my view the argument can be made that in defence of offensive statements, those making the statements have equitable access to protection under the right to “freedom of speech.” Eventually any statement made or view expressed in social media will assume the same status as those in print or speech. Only through the application of law will these statements be deemed both offensive and libelous or within the realm of reasonableness. At present the law has not been clearly defined. While I believe that both criminal and civil transgressions should be viewed and responded to as if the grievance had been printed or spoken, the law has the difficult task to determine at which point in the conveyance of the message should the force of law apply.

Who is more culpable, the speaker or the messenger? In short, the law and social mores (which both constantly evolve) have not caught up to technology but I believe that eventually the cry of “wolf” will lose its strength. This argument of “freedom of speech” reminds me of another cry for freedom. A man in Texas was charged with punching another man in the face while both were walking along the street. The accused offered as defence that he was walking along the street swinging his arms like the blades on a helicopter. And he argued this was his right to do so! He said it was the victim’s fault for walking into his fist. The presiding judge stated the accused was correct in that he had the right to swing his arms freely but his right to swing his fist ended at the end of the victim’s nose! Likewise, I believe the law will soon rule that a persons right to “swing” their views will end when it strikes another person’s well being.


The social media companies’ inaction suggests that they support the promotion of defamation and hate crimes and in my opinion they are the distributor of that content and they should be held liable. This is called implied consent in legal terms, where your inaction suggests that you agree or what we call in the marketing world negative option marketing.

So if you have a social media account with one of these companies you are also supporting the company’s defamatory and criminal actions through implied consent too. So if you agree with this logic I would suggest you deactivate your account immediately unless you want to be associated with liars, cheaters and terrorists through implied consent.

Brian Burke the President of the Calgary Flames hockey club has courageously tried to stop this nonsense and started a court action to help protect him and his family from such attacks; you can see details of his case at this link.

To get political action on this issue please share this blog with the next hypocritical politician in the upcoming federal election when they reach out to you on social media and ask them if they support terrorism, defamation or hate crimes on social media as they try to get your vote.

BTW, the social media companies have already sold all your personal info through a big data personalized marketing program to the political parties without your consent as part of their election planning. Its time we take action against this and as a concerned parent, I want to protect our children now, as governments seem not to care because of the kid who cried wolf.
About Me
Martin Seto

 
Martin Seto is the principal of Reflex Media, a media consultancy practice offering media owners digital publishing, event management and ad sales help. His media expertise also include working with ad agencies as a media buyer/planner for tv, radio, print, outdoor, magazine and online. He has been in the advertising and media industry for 25+ years and he has been an instructor/speaker with Centennial College and at magazine conferences across Canada. He can be reached at marty(dot)seto(at)
reflexmediasales.com or 416-907-6562, and on LinkedIn.

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Hi Jose, Thanks for joining the discussion also. Here is my answer, I am not willing to gamble my ...
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