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Friday Rant: And Then It Hit Me….It's Not About Distribution Anymore

By - March 04, 2005

Old Radio

When I’m driving, I listen to radio. Radio is a pretty pure medium, particularly AM. I’ve always thought AM talk radio (I listen to sports radio when I’m bored with NPR, which is a lot, honestly) was a lot like blogging – you have a host who sits in the middle of a conversation, and the best ones are really good at getting the community involved. They have regulars, they have a defined area of coverage, they clearly connect to their audience. Anyway, as I was listening to AM radio on my way back from the gym, an ad for something pretty random came on. I don’t recall the ad exactly, but it felt extremely…non-endemic. After all, everyone listening is really into sports, right? (I was listening because the Giants are back in spring training, the blossoms are on the fruit trees, and all is right in the world…)

Anyway, this advertiser sent me on a reverie. Why, in all honesty, was this advertiser buying the ad space on the radio in the first place? Was it to reach men, 24-54? Yes, certainly. Was it to reach men, 24-54 with an interest in sports, and engage them in a conversation that was related to the product they were selling? No, not really, as the ad was for something else – maybe it was a mortgage refinancing offer. Was it to speak to this audience in the language they were all speaking at the point of context – the language characterized by the host? Clearly not. The ad was abrasive, a pushy come on.

So why did the advertiser buy the ad?

And then it hit me. The advertiser bought the ad to gain access to distribution. The advertiser wanted to speak to a big group of men, and the best outlet the advertiser could find was the radio station. At that time, in the Bay area, there simply was no other option. For the most part, the advertiser ignored the context of the endemic conversation it had interrupted (sports talk, in this case), and took over the distribution channel for its thirty seconds, pushing a presumptive and noisome message into my ears.

We have all come to accept this, because that’s the cost of a closed distribution system – those with the most money will pay the most to gain access to that distribution – in short, they rent it for the highest dollar. In nearly all “old” media, sales teams spend nearly all their time hawking this fact: buy our audience, and say pretty much whatever you want to them (as long as its not illegal).

But what happens to advertising when distribution is secondary, and audience and content is primary?

That is exactly the question internet publishing and blogging opens up (at least, the best forms of it). Internet based publishers don’t control access to some finite distribution system, all they control is access to the audience itself. This, in turn, can and should skew the conversation around internet advertising to one based on endemics – is this advertiser a good fit to the audience in the *context* the site provides? Can the advertiser address the audience in a voice that respects and even adds to the conversation occurring at that site? The lack of distribution scarcity creates a subtle but important forcing mechanism – It lets the best publishers (to my mind) say “Sure, we’ll take advertising, but only advertising that respects the conversation present on a site will truly flourish.” That, in the end, creates an ecology which rewards the strongest content and authors/sites which have durable and vibrant bonds with their communities. And that, I must say, makes this publisher a very optimistic fellow.


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15 thoughts on “Friday Rant: And Then It Hit Me….It's Not About Distribution Anymore

  1. Mark Carlson says:

    John, this is your best post in a long time. Both because it is a nice insight and because you have the guts to admit you listen to KNBR and not NPR (as do I).

  2. Duane Gran says:

    Interesting points, indeed. However, I worry about keeping a line of demarcation between content and advertising. As consumers of information, for lack of a better term, we tune out advertising. Pertinent ads would be an improvement, but I don’t want them interspersed into the content or being so pertinent that the line is blurred. I’m concerned already about some reports showing young people’s lack of ability to discern content from advertising.

  3. joe blow says:

    Lack of distribution scarcity? Someone should tell that to all the SEO and SEM firms fighting to get their clients on Google’s first page of results. Strikes me that distribution opportunities are quite scarce – hence the value of adwords.

  4. Andy Havens says:

    Your conjecture would be fine, if the audience at a particular point of content was always and only just an audience for that point of content. As someone who has had a hand in spending up to $25 million a year in advertising, one thing to keep in mind is that what we spend lots of time (and money) trying to figure out, is: what do people who enjoy “this” or “that” content, also like to do? Dropping an ad for hair color into the middle of a show that’s watched primarily by men is a bad choice. Dropping an ad for a portable DVD player into a show that’s watched by affluent young suburbanites who relate to the show’s main technophile character… that’s a good match.

    Some of us referred to this subject as the “spread” of a topic, product, show, etc. As in, “I don’t think TLC spreads wide enough for text messaging.” If it won’t spread, you don’t have a fit. What you experienced while listening to the bad radio ad was simply that; a bad radio ad that someone tried to make “fit” when it couldn’t. Those have been around since Day 1 of advertising.

    You can certainly limit the “spread” of advertisers you are willing to take, no matter what the medium is. Throughout the history of advertising you have great examples of advertisers and content producers who have worked together to make great fits between their two sides of the equation. The “Hallmark Showcase” series of TV shows comes to mind. They wanted a really specific type of content for their ads, so they commissioned it themselves.

    Internet publishing and blogging are, generally, narrower media than the MSM. So they will, generally, attract narrower bands of advertisers. But if somebody came to me and said, “Here’s a big pile of money I’d like to throw at you to put my ad on your blog, and it’s for a product that isn’t really related to your subject matter. But I like your demo.” Hmmmm…. I think I’d have to say, “Yes.” I would then turn around and explain to my readers how accepting said big pile of money will enable me to take on fewer consulting jobs, thus enabling me to blog more frequently and effectively. If that works as a good trade for them, super. If not… well, there’s always NPR.

  5. I think that AM radio and local advertisers are some of the slowest to catch onto a trend that started in Internet advertising, but is making it’s way to FM and Cable/Network TV advertising. That trend is the precise targeting of ad content based on media content viewer demographics, content and specific content details.

    I know that total information awareness and search play a big part when I see an Afflack comercial and a trailer for a movie featuring an ear-biting duck moments after a segment featuring geese on Late-Night with Jay Leno. Tivo and future Neilson boxes providing microsecond granularity viewership data will only aid in this precision.

    The problem you experienced is caused by Radio and local advertisers not having access to the same content information or viewership data. Imagine how valuable GPS enabled radio recievers that logged volume, location and station data would be to radio advertisers in the same way that clickstream and nielson data is to TV and Internet advertisers.

  6. It is my hope that this trend will converge to more viewer supported media outlets such as XM radio. Push advertising is the cheapest, most precise form of advertising that anyone can hope for.

    If the average american were interviewed and asked if they preferred to have the price of each product they purchase reduced by the amount spent on advertising by the company for that product, but have their cable bill go up by $15 dollars a month to provide advertisment free content a’la HBO, I think most would be biting at the bit to make this switch. The problem is that it would reverse years of conditioning that makes us think that content is and should be free and that advertisers are annoying flys.

  7. Tom Norian says:

    Andy, I’m curious if the “spread” you talk about has been accomplished with simaltaneuos spot buys across a whole bunch of focussed shows.

    I think I understand that advertisers will pay a big premium to get everyone at once like on the super bowl. My *impression*(and I’d like to hear if I’m wrong) is that they pay more per eye-ball not only more per second of adtime.

    The super bowl is perhaps an anomoly because it carries with it an extra level of association with championship. (I think I remember Warren Buffett saying something like COKE needed to be associated with the olympics even at enormous prices because of the mental burn and connection of special times and coke or something)

    Stepping down from the superbowl, say you had a normal season show of cheers. Why won’t advertisers reach the same demogrpahics in fragments aggregating buys on travel, regional basket ball, gourmet cooking and run the ads all at the same time getting basically the same share of the same demographic but in fragrments?

    Is it as John suggests, that the more specific the content the more sentive VIEWERs are ?

    ARe their ad buy issues I am missing. Is it the hassle of aggregating the same audience in smaller segments, intitutional and frictional costs in executing mutiple deals, or behavioral ego orientated stuff inside insitutions?

    The first two seem to be addressable by an agregator like adsence.

    I’d appreciate your thoughts on the issue in pondering future activities of mine.

    How Do ten sights with 300 focused people looking each day equate with one site with 3000 viewers. (in TV I guess the numbers would be a lot bigger but I think you get my point)

    From impressions from some people, focused sites are most valuable to net advertisers with huge variation from subject to subject.

    Yet being able to get a piece of the spread buys wouldn’t be bad either. (of course recieving payment only to the extent of advertising)

    Do you think its possible that google could sell those sort of spread ads to advertisers that will apear on an immense number of tiny sites at once?

  8. Jozef Imrich says:

    All advertising, whether it lies in the field of business or of politics, will carry success by continuity and regular uniformity of application.
    – Adolf Hitler – Mein Kampf – (1925)

    Adolfs of this world have a lot to learn still … Advertising after all is the principal reason why the business man has come to inherit the earth!

  9. MUSCLE13 says:

    The precise problem of the internet as a form of media is the limitless distribution. Broadcast TV, cable, radio and satellite don’t have this problem. A few companies own most of the channels. There are an unlimited amount of websites and an unlimited amount of content hitting the net each day. (Witness the RSS feeds). The trick is aggregating all that content and personalizing it for the user. That is why content alone will not win. The search engines and the portals will win and in some cases already have won.

  10. Ranger says:

    Good post John.

    Actually, the ad you heard was likely just something bought for a general buy. I worked at a station like this for a year, and programmed commercials for a short time. Some advertisers bought a slew of ads, and so they needed to be shuffled around at all times of the day, a few hours apart from each, and the like. The only rule we had when programming them was not to put 2 ads of the same product in the same ad block – ex. Burger King and McDonald’s ads couldn’t run together.

    Radio ads – and TV and newspaper ads for that matter – are very different from the internet. They rely on you being exposed to it 16 times or more before you “connect” with the message.

    I agree that lack of context has a lot to do with this. I think much of it comes from many years of having things out of context.

    The other difficulty with these ads is measurement. Your poster above talks about buying $25 million worth of ads, choosing demographic groups and the like… but how were they ever able to determine what was successful and what wasn’t?

    This is where the *real* power of internet advertising lies – the ability to measure and adapt instantly to the audience and its wishes.

    So what are the two biggest downsides of this new field?

    A) For products to be sold instantly, there has to be instant recognition in the audience. You can’t use a signal banner or text ad to describe a brand new product to someone; what a “miracle juicer” does, the new features of the latest BMW, and so on.

    B) You have to get in the path of someone about to buy to have the best ROI for your ad.

    So its really *not* as limitless as it first appears.

    I have direct proof of this last point. I’ve worked on a PPC campaign for a certain product – we’ll call it “Tomato t-shirts”. When we advertised “Tomato t-shirts” with any websites about “Tomatoes”, our ROI was so low as not to be worth pursuing. Oh, there were a lot of sales from this broad advertising, and if you didn’t look at the money going out to reach this large audience, you’d think you were doing well. But the cost-per-“t-shirt” was 10% over our profit margin! We lost money every sale; this was paying the lowest amount possible for each ad, too.

    Instead, we had to only sell our “tomato t-shirts” on much closer matches to the term. But this meant a huge drop-off in the actual volume of sales. Even now, there’s a lot of competition for this product, so we’ve had to inch up the bid price, and the ROI isn’t great.

    Even though there’s a lot of websites out there, and even with an aggregator like AdSense, it doesn’t always pay, and in fact ad space is still quite “limited”, just not in the ways of the old media.

  11. Tailfins says:

    Interesting post, though I must say it didn’t go the direction I first thought it might.

    One question regarding this: What of Tacoda and other such networks that target users across a newtork of websites? Their idea of targeting seems to be slightly different from the behavioral targeting deployed by Google.

    The question might well be recast as: if you were in the market for a home mortgage, would that “out of context” ad still be irrelevant? Would you have welcomed it because it fit your need? Would the ad make you feel any certain way about the radio station?

    There are many sites out there with more impressions than they can sell (most community sites come to mind here). Such services as Tacoda seem like they might turn what is currently zero or low valued inventory and make it salable.

    I don’t exactly know how Tacoda or other services work, nor do I really know if they will work for the consumer. The idea, though, does seem interesting and I wonder what others’ thoughts are on the subjec.

  12. I think everyone is too deep in the weeds. The interesting thing about contextual advertising is that it does more than just give media buyers new tools – it creates content.

    Can you blog about Snowboarding and make a living – maybe. Can you blog about Modern Art – not yet. But I’m pretty sure that Bang and Olufsen would like the Modern Art blog. So would the Moma gift store.

    I guess what i’m saying is – we’ve for so long accepted that narrow niches could only be served as a vanity project, or as a loss-leader, that we need to splash some cold water on our face and realize that contextual advertising no only empowers niche content topic, it empower niche advertisers.

    What’s happening when Google sells 3.2 billion dollars worth of ads is that whole new economies are sprouting up around advertisers who – for the first time – can see customers outside of their local geography.

    And yes – there will still be advertisers who come and plunk down a pile of cash and buy a ‘bad fit’ – but content owners have to think long and hard about whether to take the short term gain.

    The folks at http Scripps Network (owners of Fine Living, Food Network, Great American Country, Home & Garden Television)
    doesn’t allow ANY product placement.

    They think the long term trust between them and their viewers would be damaged if there was a ‘play to pay’ option for advertisers. They maybe right. But contextual ads in a VOD environment would fit right in.
    Steve Rosenbaum

  13. Andy Havens says:

    Contextual advertising is great; I’m all for it. It adds an entirely new and different tool to the box. I just want to remind everyone that you have to be very careful when defining your context.

    Just because a site is “about,” let’s say, modern art, doesn’t mean that the only ads that are appropriate or contextually fitting or would be a good advertising buy are those for products that have a 100% overlap with the topic. In fact, there are probably advertisers of certain modern art related products — for example, Cubism Office Cubes for Neo-Dilberts — that would make serious viewers truly ill. The context of the content (hmmm… do we need a cool new term here… contenxt? concon? contexticon?) and the relationship between the providers of the content to their audience will help determine what “space” they make available for advertising, and then the audience they attract will determine what kind of advertisers they will be able to attract to that space.

    For example, there are tons of products and services that relate to the world of electronic music. If I was creating some kind of “channel” (blog, web site, niche cable station, whatever) that was meant to entertain and inform people in that category, I’d need to think about how widely to throw my advertising net. To think about, as I said about, “the spread.” Throw too wide… you risk alienating your audience. Should I allow computer manufacturers whose systems can be tricked out to advertise? What about videogames that feature soundtracks by well-known artists in the field? How tenuous must the link be to still be considered “within the appropriate context?”
    Does simply having an “in context” spokesperson shilling an unrelated product count? More and more, the answer to that is “no.” Getting Moby to spank your brand of vitamin water probably wouldn’t cut the mustard.

    But this was true even in the olden days (i.e., the mid 90’s) of MSM. You couldn’t hope to advertise certain products on certain programs; their content was guarded by the programmers, as well it should have been.

    As to the question of whether it’s worth more to talk to 300 people on 10 different channels, or 3,000 people on one… It depends on your goal. It’s almost always going to be cheaper operationally to talk to 3,000 in one shot. But, you will — if you can get good data back — have potentially 10x as much traffic info from the 300×10 buy. And then, when campaign version 2.0 rolls around, you might know enough to nix 3 out of those 10 channels and pump up the other 7.

    But, again… that was true in the old days.

    I’ll say it again: I love the idea of being able to match more granular content and context specific advertisers up with content providers. It’s super. It’s another case of “the long tail,” but as it applies to advertising rather than the entertainment industry. You’ve got all kinds of opportunities for small biz advertisers to link up with small biz content providers. Which is super. For the big boys, though, with millions of bucks to play with… parcelling it out in $1,000 increments in order to speak 1,000 different patois is not only a waste of time, but probably not very savvy marketing. How do you dress up a pitch on mortgage rates to make it “context specific” to an extreme sports channel? Yecchh. You shouldn’t. Just try to make it a good ad. I’m not aware of many specific “channels” out there with enough bandwidth to support the products that make up the lion’s share of the advertising dollars out there; fast food, cars, banking, pop music, clothes, beer, etc. Where do they go to spank their wares?

    Targetted advertising is a great, new tool. But it’s not the only one, and it’s not always the best one.

    And people should stop bringing up the Super Bowl. It’s its own thing. It has about as much to do with advertising as the Pope has to do with your dad.

  14. ganymede says:

    Interesting discussion with several points I had not considered. Still, I am tempted to cast my take in the vein of a plain vanilla internet surfer in the middle of Kansas, merely as a consumer of online time. No industry connection and no great insight. So here goes:

    1) I agree that contextualizing ads seems incrementally more effective. If I am spending time on a Ford Mustang enthusiast site, having an ad for Flowmaster muffles has enough consonance with the content that in the world of probabilities, there is more likelihood that I might click on it, than say, if it was just on Yahoo’s main page, or say, at Weather.com.

    2) However, this seems to be offset by my absolute and profound hatred of being advertised to at all on the web. I especially hate the ads that are temporarily unavoidable, such as the ones CBS.Marketwatch.com runs in front of you as the initial front page loads. Usually they last for 10 seconds or so. Typically there is a link in a corner allowing you to “skip this ad”. You can’t imagine how fast I skip. And usually it’s while I try to look away from the main ad! Strange, but I don’t quite have the same visceral negative reaction to t.v. and radio ads. I am sure it is simply because I am “used to” being advertised to in those channels.

    But not on th net. One of the beauties of the net to me is the ability to find blogs/pages/sites that are very narrowly cast to my interests. I like these sites for the pure congruence they have with my decision to spend, say, an hour online reading or experiencing content that I am searching for. Searching for an “ad” is about number “last” on my list of what I want to experience on any page I go to. That is unless I am searching specially for something to buy, say via a google search. Still that is less than 5% of my time online. However, if I am going to Wired, or Sci American, or a music site, etc….more to learn, than to shop, then I abhor advertising. And, frankly, I am predjudiced against the companies that do advertise to me. I feel like they are unwelcomingly yanking (or trying to yank) my attention from what I am really trying to do with my time. It’s annoying, and offensive. And it’s that “impression” they are leaving with me. Not why I should drink more beer.

    Anyway….there seems to be a ton of interest and belief that the internet is going to take all this ad share. That may yet be true. But I am going to hate every second that it happens. At the risk of sounding old school, I think radio and t.v. ads have worked because you are captured for that 30 second spot regardless of the contextual disonnance. On the internet, it’s different. To me my time on the net is about a chance to focus exactly on my interests. 9 times out of 10 an ad is a distraction, and an bad one at that. Unless of course its for Flowmaster mufflers!

    Thus, the bottom line for me is there is some room for high “fit” via tight contextual mapping. But I would be surprised if, say, sales of Gillette shaving cream are really more effective online. Sure you can find websites where the traffic is largely > 16 y.o. men, and buy that right demo. But at the end of the year, if you are an ad manager at Gillette, I’d be curious to know if it really translates into more sales. For me, it tends to make me not want to buy Gilette products! So…just to be clear…I really hate online advertising.

  15. Tom Norian says:

    Thanks for the thoughts Andy, The GAP bilboards in the outfield “gaps” at the content(baseball game) need not be particularly specific (althoug the pun helps)

    I guess I’m wondering if a CocaCola logo is worth just as much on 10 small sites adding up to the viewers on 1 ten times its size.

    Yet you mostly answered the question. My thought was not that the adveriser buys those slots but that they buy a certain number of viewrs from google and google uses their java script and site data to get that logo on “teen sport sites” or “teen lifestyle” sites small and large and the small site owners might get paid on impressions, not just clicks. (some trust in Googles restraint would be innherent to thier abilty to sell such “swaths”)

    The timing of the “spread” is part of what I was after too. How valuable (or is it only unsual) that advertisers want to hit a large wide audience all at once more based on time than on context?

    Logo’s and biboards with only mild animation are different from those screen blockers.

    But if all screenblokcers are elminated by the risk of offending consumers (I agree that given choices for content we’ll avoid those sites where possible), the smaller logos become almost as valuable don’t they?

    If all signs are small, does the total value of advertising decrease markedly? If all the local plumbers agreed to only buy a buisness card size yellow page ad, they could cut the yellow page publisher out of tons of revenue paid for the larger ads as the relative size would be more important than the abosolute size? I’d imagine there is some sweet spot on the curve.

    I’m curious for instance, how advertisers would asnwer a question like this. “IF soccer world cup games had a TV time out each quarter would Fifa’s revenue increase markedly or would it tend to be a zero sum game where the payment for the embossed logs in the corners, and the sideline ads lost as much as was gained by the video commercial breaks”?