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Mar 14, 2009

Arthur Sulzberger, Jr. Keynote Address - News Literacy: Setting a National Agenda

Ed: WSJ and NYT about the demise of their own industry.

Stony Brook University
March 12, 2009

Thank you and good evening.

It is a delight to be with you this evening and to see so many long-time friends and colleagues. We come together at a time of extraordinary change and challenge to what many would call a profession, but I suspect most of us feel is a calling.

Journalism – whether published in newspapers or magazines, broadcast on television or on the radio; or consumed online or on a mobile device – is under enormous stress, both from the permanent shifts set off by the Internet and from the cyclical forces unleashed by this current severe economic downturn.

But something even more fundamental is going on around us and it’s at the heart of this conference and our common desire to carry the banner for News Literacy far and wide. Journalism is being transfigured by the new information ecosystem and its very definition is changing. Given the volcanic explosion of Web sites, search engines and social networking channels, how could it not?

In some ways, journalism is expanding and offering us great opportunity. In other ways, it is contracting; resulting in a wave of self-doubt among practitioners of our craft and confusion among our consumers.

So let me go back in time for a moment.

Four years ago, I was asked to speak at Google’s Zeitgeist conference. My colleagues and I brainstormed about that speech and decided that a lot of the engineers in the room – many of whom had the very best educations that our system can offer – really didn’t know what journalism was.

Remember, this was the era when some thought that blog networks were going to replace the kind of journalism that we practice at The Times. So we created a video, letting our own people explain what they do to the hundreds of digerati that were in the room that day.

I want to again use this video to ground my remarks in fundamental principles, ones that all of us here tonight feel are so critical to maintaining the unfettered flow of reliable facts and knowledge that sustains our democracy.

Watch video

That was 2005, which in retrospect looks like the good, old days. While we have improved our tools and our commitment to providing world-class news and information anywhere in the world remains strong, the business model is under tremendous strain.

High-quality journalism – from covering City Hall or Iraq – is getting harder and harder to pay for. Traditional revenue streams are, in many cases, anemic and getting weaker. Due to the combination of secular and cyclical pressures I mentioned earlier, the immediate future looks, at minimum, grim.

As Paul Krugman, the Times’s Nobel Prize winning economic columnist remarked recently about the financial hurricane: “If this goes on much longer, I think I might give it all up, move to the U.S. Virgin Islands, and start a Ponzi scheme.”

Now I am not here to wax poetically about the past. It was, in its way, much over-rated (unless you’re reflecting on the glory days of working as a reporter in the Washington bureau of The New York Times, under the skilled leadership of Bill Kovach, a great boss, who was here earlier today.)

Nor am I here to bemoan our fate. Quite honestly, I am tired of reading about the death of … take your pick … journalism, newspapers, engaged readers. Even The Times today was wondering out loud on the front page as to where newspapers where heading, et tu brute. My view is that what we offer, in all its iterations, is quite valuable and our profession will endure.

In a recent signed editorial in The Times, Eduardo Porter cited another Nobel-prize winning economist, Amartya Sen, who said that China’s horrific Great Leap Forward could not have happened in India because newspapers would have closely chronicled the suffering of the people.

Closer to home, each of us can cite an example of some public or private sector boondoggle that was upended because an inquisitive journalist was paying attention. Whether delivered in print or online, in a blog or a video, quality journalism will always have immense social utility. As Bill Keller, our executive editor, noted two years ago, journalistic organizations are: “an institutional bulwark against powerful forces that would tame or silence us.”

While Wikipedia and online aggregators serve their purpose, serious news gathering operations are more necessary than ever as the public and private decision- makers and the concerned public gathers the news and information needed to more thoughtfully progress into a most uncertain future.

And finally, I am not here to tell you I have the answers to our current dilemma – attracting more revenue, be it by charging for an online article reporting on the day’s activities in the Middle East the way iTunes charges for U2’s latest hit single; or examining new journalistic organizational structures, such as moving from a traditional profit-making model to a not-for-profit entity whose funding is secure in the hands of, say, Bernie Madoff.

One of the many reasons why such a solution is so elusive is that what works for The New York Times is not going to work for Newsday or The LA Times; what works for NYTimes.com is not going to be a solution for Politico, Salon or Slate. As I will discuss shortly, each site has a different relationship to the Internet and has to be evaluated on a case-by-case basis.

In our heart of hearts, we all wish there would be the equivalent of the deus ex machina moment when the gods descend and provide us with a perfect business model for the new media. Alas, Mt. Olympus has been quiet for quite a while, and real life tends to be a bit messier and less predictable.

As an aging devotee of Outward Bound adventures, I prefer to think of this as a challenging river trip. We know where we are and we know where we are heading. What we do not know is what’s exactly around each bend. What is needed isn’t certainty, but rather flexibility, aligned with courage, stamina and expertise; all of which will be critical to the success and safety of our journey.

What is of even greater import is our adherence to core values; maintaining loyalty to those bedrock beliefs that have sustained quality journalism through so many economic and political cycles. (ed: The anchor that slows innovation. Speed and quality can complement. Don't let the quality standards and lack of understanding of technology - stop innovations targeting productivity.)

At a recent NYU Media Talk, the irrepressible David Carr remarked that: "News has always been the killer app."

In a pithy way, he expresses a deeply-held feeling. It reminds us that quality news matters and that how people will get this quality journalism will continue to evolve. At The New York Times Company, we state this journalistic value proposition or what we call our Core Purpose, just a bit more formally – what a surprise: To enhance society by creating, collecting and distributing high-quality news and information.

And on Monday, David’s media column caused quite a stir. He raised a lot of questions about the original sin of providing free content online and what we can do to either put the genie back in the bottle or create an alternate economic model that rescues newspapers.

And this returns us to the biggest issue before all of us tonight and tomorrow: what do we need to do to earn enough revenue to maintain robust newsrooms and uphold the rights and privileges granted to us by our Constitution?

It’s obvious, but let me say it anyway: for many of us, our long-term financial success will be determined by how quickly our digital revenue growth outpaces the downturn in our print revenues.

At The New York Times Company, we are focusing on three key levers to achieve this breakthrough moment: attracting more users, deepening their engagement and then earning revenue from their usage. To do all this will require making bets on how this new medium will evolve and making investments in that vision.

This is certainly not an easy task. Our insights into human behavior and technological evolution may guide us. Two main contributors to The Times’s online success are here tonight: Jon Landman – to whom I am indebted for being invited – and Vivian Schiller. Both will tell you with great pride and enthusiasm that we have been busy creating a new form of Web journalism that is both informative and compelling. At least they had better be telling you that.

For instance, if you came to NYTimes.com at noon on January 20, you would have seen: (ed: investing in features. note that news is almost an afterthought. Rather than investing hundreds of thousands per event, isn't this an enhanced photokit page?)

  • Live video of President Obama’s Inaugural address;
  • An interactive graphic comparing President Obama’s words with the language of past inaugural addresses;
  • A distinctive patchwork display of photos from readers;
  • Useful maps of inaugural sites in Washington, D.C.;
  • A wholly original reimagining of the journalistic chestnut, the “voices” story, in the form of an ever-morphing chart displaying people’s hopes for what the new president might accomplish;
  • Moment-by-moment blogging;
  • and our usual riveting reporting and analysis.

Taken as a whole, the experience was immediate, personal and compelling. And you didn’t have to struggle to leave the mall.

Engagement is the name of the game. Serious news sites must create a new, more organic, more personal relationship with its readers. While there has been a “Letter to the Editor” forum in newspapers since the late 19th century, journalism’s relationship with our readers has been one-sided.

We need to be able to respond to our audiences’ demand for interactivity, community, multimedia, news and information on an increasingly wide range of topics.

We have to respond to their desire to do something with the content we make. Our readers want to share it, or blog it, or comment on it, or tweet it. They want to use our journalism as raw material for what they make. This can be a very good thing because it does enhance our audiences’ involvement with our sites, but it also takes us back to issues of authority and what is and is not “Real Journalism.”

And, we want them to feel that they are part of a vital, ongoing conversation and that there is something missing in their lives when they stay away for too long.

Our strategy must be rooted in the fundamental premise that we must be OF the Internet, not merely ON it, requiring all of us to move from publishing our content on the Web to becoming full Web publishers.

For years, we hoped that financial success would just come from making our products more accessible, informative and entertaining. The idea was simple: work harder, be more creative and thoughtful, and the revenues will return in force. Regrettably, there were larger, more complex forces at work and we are now confronting some hard truths:

  • Let us start with the fact that a deep, cyclical downturn has dramatically affected key areas of commerce, including the real estate, employment, automotive and retail industries, the lifeblood of American newspapers and local television.
  • The Internet has proved to be a far superior advertising platform for listings. The classified businesses are disappearing from newspapers and are unlikely to migrate in any significant way to news Web sites.
  • Selected display categories are also subject to secular shifts as users move from print to digital consumption. Beyond that, marketers are growing skeptical of the ability of display ads on any platform to capture the consumer’s attention in a fragmented media landscape.
  • And, Internet businesses have proven incapable of replicating the economics of print. Few people have been willing to pay for online news. Advertising rates for online inventory are relatively low. And news Web sites are poorly organized to take advantage of the contextual advertising model that dominates the Internet.

With this in mind, there are now all kinds of solutions and tactics being offered up to allow online news sites to adapt financially to the changing conditions, but it is a little bit like the banking crisis. We know there is an answer out there somewhere, but we are not sure what it will turn out to be.

So the immediate response of journalism organizations, including ours, to all this economic and technological disruption, is to make substantial expense reductions. These have included closing production facilities, creating new methods of distribution, reducing the size of our newspapers and layoffs.

Remember what Bill Schmidt, The Times’s deputy managing editor, was saying about the expense of keeping reporters in Iraq? Now, with the sad state of news media finances, there has been a substantial reduction in coverage of that critically important area of the world. Afghanistan will undoubtedly also receive short shrift from the world’s newsrooms because of cost.

As I noted earlier, the demand continues, but we are still left in the paradoxical position of having a product that an increasing number of people use, but which has decreasing revenues and profitability. This, coupled with radically different user experiences, argues for new goals and initiatives.

We need a thorough and realistic assessment of the audience scale necessary to achieve our respective economic ambitions or consider alternative business models.

We must engage in a deep and realistic examination of the value we add for marketers, of the services that we offer today to support that value, and of the new services we will need to offer in the future. We must invest in creating the skills and competencies to accomplish these things.

We also need to pursue a set of industry initiatives that support quality news, the protection of intellectual property, the value of quality content in the advertising marketplace and, speaking of this conference, news literacy.

Taken together, this is about re-conceptualization and more thoughtful execution. It is about being bold and willing to think about all the available options and imagine a future that seems within our grasp. It is about constant reinvention and taking full advantage of the Web, an amazing laboratory for entrepreneurs, technologists and, of course, journalists.

NYTimes.com has already experimented with different strategies for collecting revenue:

In the mid-90s we collected fees from our international users, but we then changed course and opened up the site to our worldwide audience on July 14, 1997 – Bastille Day, a most fitting metaphor for tearing the online walls down.

A little less then a decade later, we launched our TimesSelect experiment, which for a modest fee provided exclusive access to Op-Ed and news columnists on NYTimes.com, easy and in-depth access to The Times’s online archives, early access to select articles on the site, as well as other exciting features.

After two years, as the Web evolved, it became necessary to change our priorities and our focus. While TimesSelect generated more than 200,000 subscriptions and around $10 million, we decided to end this initiative. We realized that the exploding world of search meant that the ad revenues resulting from our increased traffic – created by offering this content for free – would grow faster than the subscription model.

Today, in the face of the economic downturn, we have renewed our analysis of how paid content can augment our core advertising business. The trick, of course, is to garner incremental revenue from the user without significantly cannibalizing the high rate ad pages that now account for a very significant amount of money.

Unlike many local news Web sites that still depend mostly on declining classified ad revenues, NYTimes.com has a very large national display revenue stream. As we develop new pay-for-content ideas, we must carefully balance our ability to generate meaningful dollars from both sources.

Most of our thinking revolves around the fact that we have almost uniquely achieved substantial scale throughout the world and have become part and parcel of the global discourse. This achievement has significant journalistic and financial ramifications and we do not want to take any steps that significantly reduces our presence on the Web.

Other prominent news-gathering sites may be less interested in scale and that might give them the flexibility to pursue an even more aggressive paid content strategy. What we have learned over the last decade and half is that the Web has very few generally accepted rules for financial success, and they are inevitably overturned by the next digital cycle and next breakthrough algorithm.

Some of you may be wondering: Does all this activity portend the end of print?

Of course not. It is still a popular and profitable medium. (ed: false economics)

There are more than 830,000 readers who have subscribed to The New York Times for two years or more, up from 650,000 just over 2 years ago.

And just today, the Center for Media Research released a study, which revealed that:

  • 83% of Americans say print newspapers are relevant.
  • 53% subscribe to a newspaper, and
  • 55% say newspapers are their primary source of news, over national TV, local TV and "news aggregators."

This is good news: print and digital can co-exist in the marketplace. But, as we have learned over the past 15 years, we need to become even better at integrating our print and Web properties. They offer two very different products and two distinct value propositions. Our challenge is to both integrate while embracing the unique strengths of each medium.

As we think about all these economic issues, we have to keep in mind why we are here tonight. Your News Literacy Project sends a strong message that the journalistic and academic professions must do all that we can to keep our audiences, especially the younger generations, well-informed.

In last Sunday’s Week in Review, there was an excellent article by Kate Zernike, “Generation OMG”, which discussed how the children of this generation are responding to all the recent upheaval and how growing up during the Great Depression provides some useful parallels.

We can help ameliorate some of the ensuing discomfort by ensuring that our children not only follow the news, but understand what is happening. They need the tools to make sense of what is taking place around them. They hear their parents and friends relentlessly talking about a weak global economy, brutal conflicts in Iraq, Afghanistan, Pakistan and the increasing threat of nuclear proliferation.

By the way, you should read “The Inheritance,” a new book by our Washington correspondent, David Sanger, which offers some very insightful comments on some of these topics.

This is all very scary stuff. Our children need Real Journalism:

They need reassurance that the world is not coming to an end and that history teaches us that humankind is quite resilient, especially during periods of crises and controversy.

They need to know that we have persevered during World Wars, a Great Depression and the Cold War and we have the wherewithal to overcome what we face today.

The News Literacy Project will help us teach this invaluable lesson and The New York Times Company is very proud to be part of your initiative. I commend and applaud your efforts.

Together we can create a future where quality journalism thrives, where it lives organically alongside the many new forms of user generated content, amid the chaotic and swirling global conversation taking place on the Web.

Together we can ensure that citizens, especially our young people, understand the cornerstone attributes that make quality journalism important in their lives, such as verification rather than assertion; accuracy as opposed to speed and sensation; transparency and the idea of correcting one’s mistakes. In short, many of the things, my colleagues talked about in my short film.

And together, we can take these messages to our young people so they will understand how different kinds of information in this wonderfully diverse, multiplatform world can, do and will exist together.

Thank you for inviting me.

New York Times CEO: We Know What’s Wrong With Our Business. But We’re Not Sure What To Do About It

new-york-times-buildingGood news for everyone who’s been insisting that the New York Times (NYT) needs a radical overhaul in order to survive the digital era: CEO Arthur Sulzberger Jr. agrees with you.

The bad news: It’s 2009, and he doesn’t know what that overhaul should be.

Back to the good part. In a thoughtful speech he delivered at Stony Brook University in Long Island last week, Sulzberger did a nice job of laying out how the Times got to the position it’s in now — watching print dollars shrivel up while online dollars trickle in. Can’t argue with any of this:

* Let us start with the fact that a deep, cyclical downturn has dramatically affected key areas of commerce, including the real estate, employment, automotive and retail industries, the lifeblood of American newspapers and local television.
* The Internet has proved to be a far superior advertising platform for listings. The classified businesses are disappearing from newspapers and are unlikely to migrate in any significant way to news Web sites.
* Selected display categories are also subject to secular shifts as users move from print to digital consumption. Beyond that, marketers are growing skeptical of the ability of display ads on any platform to capture the consumer’s attention in a fragmented media landscape.
* And, Internet businesses have proven incapable of replicating the economics of print. Few people have been willing to pay for online news. Advertising rates for online inventory are relatively low. And news Web sites are poorly organized to take advantage of the contextual advertising model that dominates the Internet.

So what to do? Alas. “It is a little bit like the banking crisis. We know there is an answer out there somewhere, but we are not sure what it will turn out to be.”

Sulzberger does say, as his employees have mentioned before, that the Times will probably need to start charging some people some amount of money for its online product. But he also suggests that the bulk of the Times will remain free online, because “we do not want to take any steps that significantly reduces our presence on the Web.”

He also makes a vague reference to “the protection of intellectual property”, though I think the paper has recently been demonstrating what that means. And he also insists that the paper won’t give up its print product, because “it is still a popular and profitable medium.”

In the end, Sulzberger basically punts: ” What we have learned over the last decade and half is that the Web has very few generally accepted rules for financial success, and they are inevitably overturned by the next digital cycle and next breakthrough algorithm.”

The rest of the speech, available here, is well worth reading. But if you’re one of the people who despairs about the paper’s future — or finds delight in the notion of its demise — you may not find anything here that changes your mind.

Mar 13, 2009

CLIP Aardvark Social Search Service Arrives

Ed: The problem is no friends with answers or friends not immediately available. We have the answer.

by Michael Arrington on March 13, 2009

Aardvark, the secretive, invite-only social search service founded by ex-Googlers that we first mentioned late last year, is preparing to become a little less secretive (the company has changed its name from Mechanical Zoo to Aardvark). They’ll start giving users virtually unlimited invitations starting next week - until now invites have been limited to one or so per month per user.

Aardvark is a way to get quick, quality answers to questions from your extended social network. You can ask questions via an instant message buddy or email. The questions are then farmed out to your contacts (and their contacts) based on what they say they have knowledge of. If you ask taste related questions about music, books, movies, restaurants, etc., they’ll ask people who tend to show similar tastes as you in their profile.

I’ve used it for feedback on restaurant recommendations in Paris, vacation rentals in Sonoma and wine bars in San Francisco.

The service works best when you already have friends using it, which is why the company is focused on user invitations rather than just opening it up to the public. There is a wait list on the home page, and the company says they’ll start letting those people in, too. But they’ve found during beta testing that users who have a group of friends to ask and answer questions to have a better experience and are more likely to stick. One way for users to grab a quick friend list is to sign in via Facebook Connect, which imports all your Facebook friends who are already using it, and prompts you to invite those that aren’t.

The company is also experimenting with a very promising sub-product that groups people under topics of interest. We could theoretically create a TechCrunch group, for example, that lets users ask questions about startups, venture funding and entrepreneurship to each other. All those questions and answers are populating a knowledge base in the background (think Yahoo Answers but with real content), and eventually Aardvark may leverage all that data. More on this in the coming months, says Aardvark co-founder Max Ventilla.

CLIP Ad Spending Continues 2009 Spiral, Forecasts Slightly Better for 2010

Advertising spending continues in a downward spiral this year and will drop 12% in 2009, although signs indicate there may be somewhat of a leveling off in 2010, according to a recently released Media Business Report from Jack Myers.com Media Network.

The Myers report predicts a double-digit drop in total ad spending in 2009, following a 4% decline last year. It also projects this decline to continue into 2010, with a 5% dip for the full year, albeit off of a smaller base.

Newspaper advertising will among the hardest hit this year, with a 22.5% decline, on top of a 17% drop last year, the report said. This decline will be surpassed only by an expected drop of 25% in local, regional and spot cable TV ad buying. Other media to be hard hit include print Yellow Pages, terrestrial radio and magazines.

Among the brightest spots will be video game and mobile advertising, which Myers projects will grow 12% and 9% this year, respectively. Other resilient categories include online video/social networks (8.6%), online search (7%), branded entertainment/product placement (4%) and satellite radio (3%), according to Myers data.

US advertising peaked at $234.7 billion in 2007, up 3% from 2006, according to Reuters. In 2010, domestic ad spending is expected to dip to $187.7 billion.

Myers’ projections are based on fourth quarter 2008 and first quarter 2009 spending, GDP data and a study of the top 100 advertisers by Goldman Sachs, as well as industry analysis, according to a Reuters story on the report.

In related news, Barclay’s Capital revised its previous advertising revenue estimates, forecasting that US ad revenue will drop 13% this year, but improve to a decline of just 1.5% in 2010. Previous estimates called for an ad-revenue decrease of 10% in 2009 and a gain of 1% in 2010.

Mar 12, 2009

The Rising Power Of Social Media As A Traffic Driver

from A VC : Venture Capital and Technology by 

I have been looking over the referrer logs of our portfolio companies and have been paying special attention to social media (facebook and twitter in particular) and I've been noticing that both services are making significant moves up in most every referrer log. I can't reveal the specifics due to confidentiality, but there are some companies that count facebook and twitter as the second and third most important sources of traffic after the big daddy google.

Mike Arrington posted TechCrunch's twitter traffic trends today and I figured I'd do the same here and also show facebook traffic trends.

Here's the past six months of Twitter traffic to this blog:
Twitter traffic to avc

The traffic to this blog from twitter has tripled in the past six months, from around 600 visits per week to over 2,000 visits per week.

And here's the past six months of Facebook traffic to this blog:
Traffic to avc from facebook 
The traffic to this blog from facebook has gone up 5x in the past six months, from around 50 visits per week to over 250 visits per week.

I send all of my twitter posts to facebook via the twitter facebook app so I am publishing the same number of links to both services. But the interesting thing is that on twitter, my posts are only responsible for about 4,000 of the 28,000 visits in the past six months. The vast majority of the visits are coming from others either posting links to this blog or retweeting my posts. I don't think that happens very much on facebook (yet). You can see that in action because the twitter traffic comes from 952 accounts and the facebook traffic comes from only 55 accounts.

I expect that these numbers will continue to rise as twitter's user base grows and the new users become more sophisticated about sending links and retweeting. I also expect facebook's numbers to increase as the changes they are making to facebook encourage more of the same kind of activity on facebook.

Links are the currency of the web and traffic is money so these are important trends for our portfolio companies and for everyone who does business on the web.

Hulu Now No. 2 Online-Video Site, Behind YouTube

Adding Facebook, MySpace Social-Networking Tools

NEW YORK (AdAge.com) -- One year after coming out of private beta, Hulu crossed a significant milestone: By one measure it's now the No. 2 video site in the U.S. behind YouTube, and the biggest purveyor of professional video on the web.

Hulu saw a 33% surge in traffic after its first attempt to market itself to the general public.
Hulu saw a 33% surge in traffic after its first attempt to market itself to the general public.

The site hit that mark in February, according to unreleased figures from Nielsen Online's VideoCensus, after a 33% surge in traffic fueled by a Super Bowl ad, Hulu's first attempt to market itself to the general public.

That growth spurt, with 309 million video views, shot Hulu ahead of Yahoo and MySpace. Unique viewers were also up 31% to 9.5 million, but Hulu disputes Nielsen's unique-visitors figure, and ComScore puts it nearly three times as high.

The new figures put into context what NBC Universal and News Corp.'s joint venture has achieved, and the growing power of TV content on the web. NBC and Fox programming got Hulu off the ground, but now it has 130 deals with networks and studios. Its player has been embedded nearly 4 million times on more than 100,000 websites.

Higher CPMs for TV shows
In the grand scheme, saying you're No. 2 in online video is a bit like saying you're the tallest midget, as YouTube boasts 5.2 billion views a month. But it's still significant, particularly given that TV shows can garner ad rates as high as $40 to $50 per thousand viewers online, and as Hulu makes its second tour of agencies for pitch meetings as part of its informal upfront sales push.

The challenge now for Hulu is to keep growing and pad its lead. To that end, Hulu is saying hello to social networks, with a community feature it calls "Hulu Friends," which allows users to import profile information and contacts from Facebook and MySpace, as well as e-mail clients Gmail, Yahoo Mail and Hotmail. Hulu Friends will allow users to see what their friends are watching, and make recommendations.

The point here is to encourage users to spend time on Hulu itself, rather than third-party distributors such as Yahoo TV and TVGuide.com. Hulu gets a higher percentage of the gross advertising sold against viewers on Hulu (30%) vs. those watching Hulu on partner sites such as Comcast's Fancast or TVGuide, which take a 10% cut. Community functions will also keep viewers around longer, and allow Hulu to show them more ads.

"From an ad perspective, this is about bringing users to Hulu and having them spend more time on the service," said J.P. Colaco, Hulu senior VP-sales.

Targeting users
But there's another upside: It will encourage more users to register, which will allow Hulu to target them based on demographics, location, viewing history and preferences. So far, Hulu execs said several million users have registered to receive customized recommendations.

As part of its distribution deals with content owners, Hulu can't sell individual TV shows such as NBC's "30 Rock"; rather, it sells demographics, so the ability to target a large number of users across many shows is Hulu's proposition.

Soon, when its exclusive distribution deals with NBCU and News Corp. expire, Hulu will be one of many sites, including Veoh, Fancast and CBS's TV.com, with roughly the same or similar content.

That means Hulu is in a race to make itself essential to online TV viewers through features such as search, recommendations and community, and to advertisers through targeting.

Mar 10, 2009

27 Huge Publishers Join To Replace The Banner

Ed: Finally, a sensible move by traditional publishers to innovate with change.
  • Banners did not serve advertisers well. It's time to abandon them.
  • Rich interaction is the future of online advertising - joint standardization allows users to acclimate to change with the least noise.
  • Publishers cannot lay back and let Google commoditize online ads. The millions spent by Google to integrate CPM banners into AdWord is now wasted.
  • Fixed, XXL, Pushdown - what a horrible set of names from a group that should understand branding. Gag. What can we expect from a committee of dinosaurs.
Nevertheless, urgency probably motivated the need to change. About time.

27 publishers with a reach of about 109 million unique visitors per month -- that's 66% of the total U.S. Internet audience -- have agreed to try one of three new online ad formats sometime before July. The publishers are all members of the online publishers association (OPA).

Here's how an OPA rep described the units:

  • The Fixed Panel (recommended dimension is 336 wide x 860 tall), which looks naturally embedded into the page layout and scrolls to the top and bottom of the page as a user scrolls.
  • The XXL Box (recommended dimension is 468 wide x 648 tall), which has page-turn functionality with video capability.
  • The Pushdown (recommended dimension is 970 wide x 418 tall), which opens to display the advertisement and then rolls up to the top of the page.

The formats they've agreed on all have one trait in common: they are much bigger and more attention-grabbing than the banner, which is despised by publishers, advertisers and readers alike as an ad unit.

This heatmap image from a 2007 eye-tracking study is perhapst the best illustration of why publishers and advertisers hate banners:

Here's what the Pushdown unit looks like closed and then open:

The OPA wasn't able work up any mocks for the other two new ad formats, but from what we can tell, they'll look remarkably similar to the units VideoEgg mocked-up for a recent presentation on the future of online advertising:

The 27 participating publishers are:

  • BabyCenter
  • Bizjournals
  • Bloomberg
  • BusinessWeek
  • CBS Interactive
  • CNN
  • Condé Nast Digital
  • Discovery Communications
  • ESPN
  • Forbes.com
  • FOXNews Digital
  • IDG
  • iVillage Network
  • Martha Stewart Living Omnimedia
  • Meredith Interactive
  • msnbc.com
  • MTV Networks
  • NBC Universal
  • New York Media
  • The New York Times
  • Reed Business Information
  • Reuters, Time Inc.
  • USA Today
  • The Wall Street Journal Digital Network
  • Weather.com

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