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The 140 Character Video Is Six Seconds Long

By - January 24, 2013

Twitter announced its integration of Vine today, and to put not too fine a point on it, the service is, in essence, a way to create a video tweet. If a text tweet = 140 characters, then a video tweet = 6 seconds. More details over at TNW, but this announcement is quite consistent with my post earlier this week: Portrait of Twitter As A Young Media Company.

I’ve long pined for the time when video enters the grammar of our ongoing communication on the web. This is Twitter’s bid to frame how the medium might join the conversation. It’s not a new idea – I guess 12 Seconds was three years early and six seconds too long – but it’s an idea whose time may have come. I’ve seen the iOS app, and it’s very slick, allowing for seamless pauses and cuts. And man, is the example on Twitter’s blog (embedded here) cute. I could stare at it for a long time…well, no, wait, I did stare at it for a long time. I bet you are too. Video is very … engaging when done well.

Advertisers, sharpen your six second pencils. Here’s another native format for you to consider….

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Portrait of Twitter As A Young Media Company

By - January 21, 2013

Last year I predicted that Twitter would become a media company. However, I focused mainly on the new “Discover” functionality, and I probably should have gone a lot further. In this piece, I intend to.

So I’ll start with this: 2013 will be the year Twitter starts to create, curate, and co-create media experiences on top of its platform. I hinted at this in my brief coverage of Twitter’s Oscar Index (see Twitter’s Makin’ Media), but allow me to put a bit more flesh on the bones.

So what might one make from the fact that your platform captures hundreds of millions of individuals declaring what’s going on at any give time? Well, let’s break down some of the signals in all that supposed noise. As I’ve written over and over and over in the past several years, Twitter presents a massive search problem/opportunity. For example, Twitter’s gotten better and better at what’s called “entity extraction” – identifying a person, place, or thing, then associating behaviors and attributes around that thing. This (among other reasons) is why its Discover feature keeps getting better and better. Another important signal is location – Twitter is increasingly focused on getting us to geolocate our tweets. A third signal is the actual person tweeting – his or her influence and interest graph. Yet another signal is time – when was the entity tweeted about?

Real time entity extraction crossed with signals like those described above is the Holy Grail – and I’m guessing Twitter is almost, if not already there.

Once you get good at all these things (and more), a number of really interesting possibilities open up. Identifying “big things” that are going on at any given time is something that Twitter already does – though not particularly well (the best window in is the “Trends” box on the left of the page). Regardless, Twitter has become a go-to service for quick updates about news events (Sandy, Newtown, etc), entertainment events (SuperBowl, Oscars, Grammys, etc), and well….pretty much any kind of event.

But so far, it’s not exactly easy to get the big picture of what’s really going on for any given event on Twitter. In fact, it’s rather difficult. You can search for a hashtag, or keywords you think are associated with an event, but no matter what, it’s extremely difficult to makes sense of it all. For a big event like Sandy Hook or the Oscars, there are literally millions of tweets to sift through. And those tweets have millions of pictures, links, and videos. How can you know what’s important?

This is exactly the problem that  media experiences are designed to solve. By combining intelligent algorithms (these tweets are retweeted more than others, this video is linked to more than all the others, etc) and some smart editors, Twitter can (and most likely will) surface instant windows into events as they unfold around the globe. I imagine logging into Twitter at some point in the future and seeing a dashboard not of Trends, but of “Happenings” – Events edited to my interest graph, location, and the like. When I click on on of those events, I enter a meticulously edited media experience – a pulsing, ever changing feast of information tailored around that event.

So, put in one sentance: Twitter’s going to do events soon.

What other media experiences might Twitter create? Well, extending the logic, it only makes sense that Twitter will curate media services, just as LinkedIn and now Facebook are starting to do (I argue that Graph Search is a media play here).

“Just Landed” – from 2009.

As Google has proven, words have a lot of power on the web. They have even more power when put in context at scale. Consider what happened when a data artist asked a simple question: Where are people when then tweet that they “just landed”?

Now, imagine Twitter stands up a service that allows you to see patterns around phrases like “looking for someone to…,” or “just got a job,” or “python developer,” etc. Yep, lurking inside all that Twitter data is a pretty powerful job service. And I’m only using jobs as a straw man (and because it’s a driving force of LinkedIn’s success, of course). When you have humanity whispering into your ear at scale, you can tune in any number of valuable signals. Getting a job is one important signal. But so is getting married, buying a house or a car, graduating, and, and and….well you get the picture. Standing up “media services” around these life milestones is what media companies do. They used to be called magazines. What might Twitter call them? In 2013, we’ll most likely find out.

So far I’ve proposed two new media features of Twitter: Events and Media Services. I’ll round out this post with a prediction around a third: Video. Video is a vastly under-leveraged asset on Twitter, but people are sharing millions of links to video clips every day on the service. I imagine that Twitter will soon offer some kind of video curation feature – giving its base the ability to find the most popular videos based on pivot points of time, interest, and people. Surfacing and creating more video on the Twitter service has got to be a major priority at the company. And let’s not forget that Twitter bought Vine, after all…

After all, everybody loves video. In particular, advertisers love video. After all, Twitter is already working with Neilsen to become the official barometer of television conversations.

Which brings me to the “stick the landing” portion of this particular round up. Twitter is going to make much more media this year, because Twitter is going to make much more money this year. Each of the features I described above – Events, Media Services, and Video – bring with them inherent business models. I don’t expect they’ll look like traditional display models, of course, but I would not be surprised if they strayed a bit from Twitter’s current Promoted Suite products. With new media products come new advertising products. And new revenue.

Time will tell if I got this one right. Meanwhile, what do you think?

Predictions 2013

By - January 07, 2013

Mssr. Nostradamus

One week into the new year, it’s again time for me take a crack at predicting what might come of this next spin around the sun, at least as it relates to the Internet ecosystem. Last year’s predictions came out pretty well, all things considered, but I took an unusual tack – I wrote long posts on each of the first six, and then shot from the hip for the last one. Those last shots were pretty hit or miss, as you might expect.

This year I’m going to try something new. Instead of trying to get everything right – which often means being practical and reining in some of my more obvious biases – I’m going to make predictions based on what I wish would happen. In other words, below are things that I hope occur this year, even if the chances of them happening may be arguably slim. In the past I’ve edited out a fair amount of this impulse, as I was aiming game the odds in my favor. But for whatever reason – perhaps because this post marks my 10th year of predictions – I feel like airing it out and seeing what happens. So here goes.

2013 will be the year that….

- We figure out what the hell “Big Data” really is, and realize it’s bigger than we thought (despite its poor name). Asked in 1995 whether the Internet was overhyped, John Doerr famously said “It’s entirely possible that the Internet is underhyped.” He was right, by a long margin. This past year, no secular trend has been more hyped than “Big Data.” But very few of us even know what the hell it is. This was also true of “the Internet” in 1995. But I’ll say it here, for the record: The role of data in our personal, social, and commercial lives is far larger than the current hype. It’s bigger than the Internet – it’s as big as big can be defined, because data, in the end, is our way of defining every single entity that matters to us, and then making that liquid to to world. This is really, really big – Matrix narrative big, big in every nuance and meaning of the word. And 2013 will be the year we look back on as the moment most of us came to that realization. Related to this, we as consumers will begin to make more and more choices based on how companies treat data, in particular, on whether those companies allow consumers to control data. Smart companies will begin to market on this distinction.And yes, this is very much at the heart of my work this year.

- Adtech does not capitulate, in fact, it has its best year ever, thanks to … data. Ever since Terry published his Lumascapes on ad tech, we’ve all been waiting for the capitulation amongst those VC-backed companies. The reasoning goes something like this: There are way too many similar companies chasing the same opportunties, and far too few intelligent buyers or markets for samesaid companies. But what if the capitulation came, and no one noticed? That’s what’s going to happen in 2013. Plenty of companies will be sold, either for profits, pushes, or parts, but far more will launch and/or lean merrily forward, serving their niches well and building out their businesses, figuring out how to better leverage my first prediction. There will not be a systemic collapse in adtech, because adtech is one of the most important and edifying developments in marketing since search – the namesake of this site. In fact, given that I’m trending toward hyperbole, let me say it straight up: Besides the Internet itself, the ecosystem we are creating through adtech may well prove to be the single most important digital artifact we’ve ever created – more important than search, because it subsumes it, more important than the financial system, because it’s far more open and accessible. If we get adtech right, we may well be creating the prototype for how we manage all that “Big Data” in our lives, across all aspects of human endeavor – transportation, energy, finance, healthcare, education – pretty much anything that has a marble building in Washington DC. Of course, by the time this happens, no one will call it “adtech” anymore, but trust me – adtech is an artifact of a future we’ll all be living in soon.

Google trumps Apple in mobile. Sure, Android has already gotten larger market share than iOS, and lots of tech pundits (myself included) are making loud noises about how the Nexus 4 is a winner. But that’s not what I’m talking about here. Apple still beats all comers when it comes to revenue, margin, and perception. But in 2013, what I wish for is that Google takes Apple’s crown. And here’s how it could happen: First, Google comes out with a device (maybe it’s with a partner like LG for the Nexus 4, but more likely, it’s a real Google phone, from Motorola) that is just inarguably better than Apple’s, and, it’s available at scale. The Nexus 4 is close, but it’s a half step toward what Google really needs – they need the Next Big Thing. You know, what the Razr was back in the late 1990s. What the iPhone has been for five years. And I think they’ll do it. Next, they need to recommit to their focus on interoperability and openness in operating systems. Google needs to actively promote a vision that is 180 degrees from that of Apple: Open, interoperable, accessible, ungated. This allows for real innovation in UI, services, and apps. Google will win by highlighting things that only Android-based devices running Jellybean or later can do: you (consumers and developers) can interact with digital services and content in a web-like fashion. On Apple’s bespoke devices, you get whatever Apple thinks you deserve. Lastly, Google will openly license the hardware platform of its world-beating phone free to all of its partners. Yes, that’s crazy, but it also gives Google the ability to win the PR war with Samsung, in particular, and continue its long record of taking what used to be costly, and making it free (it also won’t hurt Google in its endless antitrust battles around the world). Google shouldn’t fall into the rabbit hole of thinking it’s a hardware sales company. That’s Apple and Samsung’s (and HP’s and and and…) cross to bear. Google is software and services company, period end of sentence. (And yes, media is software and services).

The Internet enables frictionless (but accountable) payments, enabling all manner of business models that previously have been unnaturally retarded. Closest to my heart is payment for content, of course, but beyond media, 2013 will be seen as the year a number of forces converged to push paid services to its rightful place next to advertising as a core driver of the Internet economy. I know PayPal et al are already massive businesses, but frictionless they are not. Nor do we have a solution that crosses platforms and devices in a manner that doesn’t give pause (or headache – for example, there’s no way to track what you’ve paid for across the Internet, if you happen to use more than one service). But as I said, many forces are converging to enable such a dream: First, consumers are now accustomed to paying for services and even content online. We have Paypal, Amazon, Netflix, Xbox, various media paywall experiments, mobile devices and their app stores to thank for that. Second, one word: Square (and the companies it is disrupting or pushing to new innovations, including card companies like American Express). Third, major consumer-facing online platforms based on “free” – Google and Facebook chief among them, though Twitter is a potential player here as well – will begin to press their customers for real dollars in exchange for premium services. Facebook is already doing this with its promoted posts, Google with paid services around its Apps for Business. I expect both will either try to buy Box, or forward their own Box-like services in 2013. (Don’t get me started with Apple’s iCloud.) The short of this one is simple: For 15+ years, we thought mostly otherwise, but paying for services online makes sense for both customers and businesses. You all know I believe in advertising, but I don’t want to live in a world where marketers are footing the bill for everything we do digitally. That’s not good for anyone, including marketers.In 2013, the flywheel of paid will start to spin in earnest, driving down costs, but increasing overall revenues.

Twitter comes of age and recommits itself as an open platform. Twitter has confounded critics and naysayers for years, and nowhere more directly than in its developer base, who were given plenty of reasons to complain last year. Several key proponents of the service have publicly left the service, even going so far as to start competing paid services that feel more “pure.” I applaud these services, but I think Twitter is playing a longer term game, and 2013 will be the year it becomes apparent. Twitter knows a couple of things to be true: First, it cannot execute all the goodness possible in its ecosystem on its own, it needs great developers. And second, its competitive advantage, compared to Facebook or Apple (and even Google, at least as it relates to G+) will be its relative openness. So the company will clarify its sometimes confusing rules of the road for its developers this year, and some breakout new services will emerge (key to this is defining what the unit of value is for the Twitter ecosystem – IE, how does one build a business that relies on Twitter if you don’t know whether that business is in a fair value exchange with Twitter?). I’ll even go so far as to predict that Twitter will once again hold a conference for its developers (something it did once, a few years ago, then abandoned). Also, Twitter will reconfirm its commitment to being “the free speech wing of the free speech party,” and get itself into some good old fashioned tempests with Big Overbearing Governments and Corporations, much to the delight of folks who used to cheer Google for doing similar things in the past. And as I referred to in my previous prediction, I think it’s entirely possible that Twitter begins to test or even roll out paid services across its network this year. This makes sense for any number of reasons, one of which has to do with diversifying revenues in advance of an IPO, but the other is simply part of the secular trend I note above. Twitter is a technology-driven media company, and strong media companies have both subscription and advertising businesses. And let’s be frank: when advertising is not 100% of your revenues, you can afford to be more open and transparent in your business dealings.

- Facebook embraces the “rest of the web.” Even as Facebook continues to be, for the most part, a world apart from the principles and ideals of the open web, I believe 2013 will be the year it realizes it’s OK to share – bilaterally – with The World That Isn’t Facebook. That means making it really easy to export your identity and data, for example – competing on service, not lock in. And creating a kickass web-based advertising network/exchange. And  learning how to play nice with the hundreds of thousands of publishers out there, pro, semi pro and amateur, who create the value that drives so much engagement on its core platform.

- By the end of the year, Amazon will have an advertising business on a run rate comparable to Microsoft. Amazon doesn’t like to talk about its advertising business, but it’s already large, and 2013 will be the year it breaks out. It will be smart, programmatic, data-driven, and rapacious.

- The world will learn what “synthetic biology” is, because of a major breakthrough in the field. When I met last year with Joi Ito, director of the MIT Media Lab, he was emphatic about a field where he felt extraordinary breakthroughs might occur: Microfluidics. Given his enthusiasm, I’ve spent a fair amount of time learning from folks active in the space, and reading up on what the larger implications might be. Without going too deep into it, microfluidics are an important enabler to the synthetic biology movement, about which you may learn far more by reading George Church and Ed Regis’ Regenesis: How Synthetic Biology Will Reinvent Nature and Ourselves. I’ll be writing a lot more about this field later in the year, it’s filled with wonderful, talented people who, as a group, remind me of the folks who built the digital revolution in the 1970s, 80s and 90s. The analogy is more than poetic, it’s quite literal as well. This year, it will become apparent as to why.

Well, I’ve gone on for more than 2000 words now. And yes, I’m avoiding making predictions about Yahoo, or Tumblr, or any number of others, though I certainly have opinions on them. But I think that’s enough for one year. If I could summarize my wish list for the Internet through these predictions, it’s this: More open, more real breakthroughs, and more deep understanding of the true importance of the industry in which we all participate.

Remember, these are predictions that I wish will come true. Happy New Year. Now go make all this happen, willya?

Related:

Predictions 2012

2012: How I Did

Predictions From Last Year: How I Did (2012 Edition)

By - January 02, 2013

Every year around this time I do two things: First I look back at my predictions from a year ago and grade myself, then I get around to making a new set of predictions. These are often my most popular posts of the year, proving the old magazine saw that the world loves a list. So who am I to buck the trend? Let’s get cracking on seeing how my crystal ball turned out, shall we?

As you can see from my 2012 predictions roundup, I took something of a new approach to the prognostication game last year. Instead of one lengthy post with all my predictions, I actually broke them into a series of posts, seven in all. I went into detail on why I thought each forecast would prove correct (save the last one, which was a series of “shoot from the hip” predictions.)

I’ll be as brief as I can with this review – this marks the ninth time I’ve done it. Overall, I’ve had a pretty good run of it. I hope 2013 keeps pace.

Predictions 2012: #1 – On Twitter and Media - Twitter will become a media company, and the only “free radical of scale” in our Internet ecosystem. 

I think it is fair to say this one came true in spades. Twitter is a major force in media now, a statement that could not be said just one short year ago. As I wrote in my essay: “Twitter is an engineering-driven company, but its future rests in its ability to harness the attention of its consumers, then resell that attention to marketers.” Pretty much every major move Twitter made this past year was about securing its media-based business model. Twitter consolidated its control over its distribution, introduced “Twitter Cards” to keep readers engaged on its own platform, refined it’s increasingly addictive “Discover” media feature, introduced a broader and deeper set of engagement-based advertising products, and much more. Twitter is now seen as an essential partner for every major media company in the world – the hash tag is now a television and movie marketing essential. (Oh, and I predicted that there’d be conflict with Flipboard’s CEO being on Twitter’s board. He’s not anymore.)

The second part of my prediction: That Twitter is the only “free radical of scale” in the Internet ecosystem is also true. No other company boasts Twitter’s scale, importance, and independence. I think it’s arguable that Yahoo might come back from the near dead to claim a similar status, but I doubt it. More on this as I review my second prediction below. Meanwhile, I put this prediction in the “got it right” side of the ledger.

Predictions 2012: #2 – Twitter As Free Radical, Swiss Bank, Arms Merchant…And Google Five Years Ago - Every major player on the Internet will have to do a deal with Twitter, and Twitter will emerge as a Swiss like, open, neutral player in the battle for the consumer web.

Well…not so much. If ever I could be blamed for predicting what I personally wished would become the truth, this is it. I deeply believe that the Internet needs a distribution and application platform that is independent of business model bias (IE, Facebook has a bias toward leveraging its social graph business, Google has a Search bias, Microsoft a Windows bias, etc). I saw – and still see – Twitter as potentially that kind of a business. But the company didn’t do too much to prove my point in 2012. In fact, one could argue it went in exactly the opposite direction, though I don’t fall into the same camp as many of Twitter’s most strident detractors.

Most of Twitter’s moves – cutting off developers who create Twitter interface clients, for example – are a result of the company consolidating its core business model of serving advertisers (and, arguably, end users) a consistent, reportable experience. Other big news-creating moves – like cutting off LinkedIn and Instagram – were decisions calculated based on value exchange – Twitter felt that the companies using Twitter’s resources were getting more from Twitter than the Twitter ecosystem was getting back. I don’t find such moves to be inconsistent with my prediction on their face. I think the jury is out as to whether Twitter can find a Swiss-like position in the Internet ecosystem. The big question is whether it can quantify what “value” is for a developer, so developers can build on Twitter’s platform without worrying about shifting sands. And the big guys who have rejected Twitter as a competitor – Google with Google+, and Facebook of course – will most likely have to come around to a position that at the worst views Twitter as a real force that needs to be integrated in some way with their core products. In the long run, “co-opetition” is a proven strategy in the business world.

Meanwhile, I do find Twitter’s core DNA and philosophy to be far more “Googley” than any other major Internet company. The management team believes in transparency and openness as their True North, and I wager this philosophy will be both challenged and proven in 2013.

Overall, I’d say this prediction was about half right. A push, neither right nor wrong.

Predictions 2012 #3: The Facebook Ad Network - Facebook will launch a web-wide competitor to AdSense. 

Now, one could argue this did not happen in 2012. But I’m going to say it has – in 2012 Facebook made several moves that changed the web-wide business of advertising significantly. First, it tested off-site advertising with Zynga. Next, it launched a game-changing programmatic ad exchange, FBX. While this network only allows access to Facebook’s domain-specific inventory, it’s a massive injection of liquidity into the overall Internet advertising landscape, and laid the groundwork for an Adsense like play across the rest of the web. What I got wrong was that instead of starting with the HTML web, Facebook started instead in the very place it was seen as weak, on the mobile web. Regardless, this mobile network is in fact a “web-wide competitor to AdSense,” if you take the web to include mobile, which I certainly do.

So I’ll score this prediction in the “got it right” camp, even if the final shoe – a PC web network – has yet to drop. It will.

Predictions 2012 #4: Google’s Challenging Year - Despite doing well overall, Google will fumble one big play this year. 

In my essay on this topic, I predicted that Google will fumble either Google TV, Motorola, or Google+ in 2012, and then reasoned that the real story would be how the company bounced back once the fumble occurred. This prediction came true – Google blew its integration of Google+ into search earlier this year, but has slowly and surely corrected the blunder. Since then, the company has navigated any number of major issues – multiple government probes, integration of Motorola, bringing the Android beast to heel – quite admirably.
I think this one goes comfortably into the “got it right” category, but I’ll admit I didn’t predict how strongly the company would rebound from its initial missteps.

Predictions 2012 #5: A Big Year for M&A - 2012 may well be the biggest year of all for Internet M&A. 

Well, sort of. We did have the big Instagram deal, and tons of “acqui-hires”, but the year didn’t turn out as I predicted in terms of major ad-tech deals. We all thought Yahoo was going to become a buyer again, but that didn’t pan out, thanks to the CEO turnover there. On the plus side, data from Thomson Reuters does show 2012 as a very big year for exits – one of the biggest in recent history – but much of that was due to the Facebook IPO.
Overall, I’d say I missed this one, even if I do look smart for calling out Instagram in my original post.

Predictions 2012 #6: “The Corporation” Becomes A Central Societal Question Mark - We’ll all start to question what role the corporation plays in our society and culture.

It’s very difficult to score this one, because it’s so much about cultural zeitgeist. What is the role of “the corporation” in our world, both personal and social? If nothing else, 2012 was a year where we began to ask this question in earnest. It’s the year that “the 1%” and the “99%” became cultural talking points, where we debated the role of government in moderating the profits of the few over the well being of the many, and where that debate ran all the way to last night – when the fiscal cliff was averted, in the main, by kicking this question down the road a few more months.

I think I overestimated the speed with which we will take up this question in our society. When we look back with the lens of time and history, I think it’ll be clear that the role of the corporation was a central issue of the early 2000s. But to call it in one year was premature.

For me, this one was a push.

Predictions 2012 #7: Shooting From The Hip

In which I cover a number rapid fire predictions. In turn:

- Obama will win the 2012 election, thanks in part to the tech community rallying behind him due to issues like SOPA, visas, and free speech.

Well, this one happened. Score one in the “got it right” column.

- Both Apple and Amazon will make billion-dollar acquisitions. More interestingly, so will Facebook.

Facebook checked the box with Instagram, which was really a bit below the billion dollar mark, thanks to the IPO not quite working out as expected. Apple did not take my prediction to heart, though it did buy AuthenTec for about $350 million, and speculation about its Next Big Move continue. Amazon nearly hit the billion dollar mark with its acquisition of Kiva Systems, but that deal wasn’t the one I was expecting.

So, call this one a mostly miss, which to be fair, means it was a miss….

- Android will be brought to heel by Google, eliciting both massive complaints and cheers, depending on where you sit.

I think this is happening. I can’t go into massive detail, but I think the latest version of Android is very good (I am now a user), and the Play store is For Real. I’d score this a “got it right.” I’m sure some of you may disagree, though. I’d like to hear why.

 - Microsoft Windows Phone will become the Bing of mobile (IE, move into double digit market share).

Oops. I clearly should have done my homework first. IDC predicts that double digit smartphone market share will happen for Windows in 2016. Last year, the company had about 2.6%. However, that number is higher in international markets. But I can’t claim a win based on double digit penetration in Spain. So, this one is a miss.

 - Microsoft Xbox will integrate meaningfully with the web (Kinect is key), and start to compete in social across the digital spectrum

An ecosystem is developing, but this is simply not there yet. I’m not sure if it ever will. Another miss. I clearly need to stop making predictions about Microsoft.

- IBM will emerge as a key player in the consumer Internet.

Nope. I’m not even going to pretend this happened, though I bet I was simply too early here. I may revisit this once IBM makes a move (if it ever does!). Another miss.

 - China will be caught spying on US corporations, especially tech and commodity companies. Somewhat oddly, no one will (seem to) care.

It’s happening, (more and more), but we haven’t yet had the spectacular news (like the Google hack last year) that gets folks all excited (so they then can ignore it). Instead, it seems we just see it as business as usual. I think this is a mild “got it right” – but upon reflection, it wasn’t so hard to predict in the first place.

- A heads up display for the web will launch that actually is worth using, but most likely in limited use cases.

Thanks, Google Glass!

So that’s it. In review, I made 14 predictions. By my score, I got 7 right, 5 wrong or mostly wrong, and 2 were a push.

But to be fair, four of my “wrong” predictions were in the “shoot from the hip” category. I think I’ll drop that for 2013 and focus on the ones where I put in serious thought. For those six predictions, my score was better: 3 right, two pushes, and one miss (on the M&A front).

How do you think I did?

Retargeting Is Just Phase One

By - December 21, 2012

Toward the end of the year, annual predictions come out (I’ve been guilty of this for nearly ten years now). I was perusing these from Triggit founder Zach Coelius, and his ninth one hit me right between the eyes:

Retargeting will be taken out of the tactic box marketers have been myopically placing it into, and instead they will recognize that retargeting is simply the first step to a sophisticated data driven marketing strategy.

Retargeting, or the practice of showing you ads from sites you’ve recently visited, is all over the web these days, and many folks revile the practice. But as Zach points out, retargeting isn’t the end game, it’s just the beginning.

It’s actually a good thing that we as consumers are waking up to the fact that marketers know a lot about us – because we also know a lot about ourselves, and about what we want. Only when we can exchange value for value will advertising move to a new level, and begin to drive commercial experiences that begin to feel right. That will take an informed public that isn’t “creeped out” or dismissive of marketing, but rather engaged and expectant – soon, we will demand that marketers pay for our attention and our data – by providing us better deals, better experiences, and better service. This can only be done via a marketing ecostystem that leverages data, algorithms, and insight at scale. And we are well into building that ecosystem – to my mind, it’s an artifact of humanity that is far larger and more significant than my original idea of the Database of Intentions.

More on that soon, but for now, just a short note to point to Zach’s post. It’s going to be a very exciting year to be in our industry. Expect my predictions, and round up of how I did in 2012, in the coming week or two.

For Microsoft, The Worm Turns Through Apple

By - December 11, 2012

(image) Wow. That’s about the sum of my initial reaction to this story from ATD: Exclusive: Microsoft Pressing Apple to Take a Smaller Cut on Sales Inside Office for iOS.

The wow isn’t that Microsoft is trying to reduce the 30% cut Apple takes on every dollar that flows through the iOS ecosystem. That’s to be expected, though I very much doubt it will happen.

The wow, to me, is how massively the world of software has changed, in particular as it relates to Apple and Microsoft.

I started covering this space in 1987, when Apple was a heroic underdog and Microsoft ruled the world. Apple built bespoke computers that struggled for marketshare in the face of the Windows hegemony. Microsoft, on the other hand, eschewed hardware but built lots and lots of software. Its core profits came from the PC software and OS businesses, but it also had a small division that made Macintosh applications. Because Microsoft’s Windows OS was a major competitor to Apple, we reporters would constantly speculate that Microsoft was was close to pulling its support for the Apple platform, just to  hasten the demise of Apple’s competing offering.

In fact, at one critical juncture in Apple’s history, Steve Jobs practically begged Bill Gates to keep making software for the Mac, then cut an investment deal with him which kept Apple in business.

But regardless of whether you bought a Mac or a PC, once you had your computer, you then bought applications for it – separately, and without any platform tax. The PC and the Mac were what Jonathan Zittrain calls generative ecosystems – anyone could build a business on top of IBM or Apple’s computers, and Microsoft certainly did.

If you had told me back in 1987 that within one generation, Microsoft would be forced to give Apple a 30% cut of its software revenue just to be available on the iOS platform, well, I would have told you to step away from the bong. What a ridiculous notion!  But that’s the way the worm has turned – Microsoft is now at the mercy of Apple, and is playing a high-stakes game of chicken. On the one hand, it needs to distribute its apps on iOS devices (iOS is particularly important to Microsoft’s cloud ambitions, and that is at the heart of this dispute). On the other, Microsoft’s DNA – remember Ballmer has been there since 1980 – is violently opposed to Apple’s pay-to-play business model.

It’s actually possible that Microsoft could abandon its commitment to building for Apple – but for entirely different reasons than any of us might have imagined some 25 years ago. Fascinating stuff.

Facebook Is Now Making Its Own Weather

By - November 09, 2012

(image) The past month or so has seen the rise and fall of an interesting Internet tempest – the kind of story that gets widely picked up, then quickly amplified into storms of anger, then eventually dies down as the folks who care enough to dig into the facts figure out that the truth is somewhere outside the lines of the original headline-grabbing story.

The topic this time around centers on Facebook’s native ad unit called “Sponsored Stories,” and allegations that the company is gaming its “Edgerank” algorithm such that folks once accustomed to free promotion of their work on Facebook must now pay for that distribution.

Edgerank determines the posts you see in your Facebook newsfeed, and many sites noticed that sometime early this Fall, their traffic from Facebook shrank dramatically. Others claimed traffic had been declining since the Spring, but it wasn’t until this Fall that the story gained significant traction.

I’ve been watching all this play out – first via an angry post on the New York Observer site in which the author posits that Facebook is “broken on purpose” so as to harvest Sponsored Story revenue. An even angrier post on the same theme came five weeks later on a site called Dangerous Minds. From it:

Spring of 2012 was when bloggers, non-profits, indie bands, George Takei, community theaters, photographers, caterers, artists, mega-churches, high schools, tee-shirt vendors, campus coffee shops, art galleries, museums, charities, food trucks, and a near infinite variety of organizations; individuals from all walks of life; and businesses, both large and small, began to detect—for it was almost imperceptible at first—that the volume was getting turned down on their Facebook reach. Each post was now being seen only by a fraction of their total “fans” who would previously have seen them.

The author goes on to argue that Facebook was breaking the implicit contract between himself – an independent blogger – and Facebook, the corporation.

…as a publisher of a medium readership blog, I used to get a great deal from using Facebook—but I understood it to be a two-way reciprocal arrangement because I was driving traffic back to Facebook as well, and reinforcing their brand awareness with prominent widgets on our blog.

Now, if you’ve read my Thneeds post, you know I’m sympathetic to this point of view. I believe large social platforms like Facebook and Twitter “harvest” content from the Indpendent Web, and leverage the traffic and engagement that this content creates on their platforms to their own benefit via scaled advertising offerings. Most of us are fine with the deal – we promote our work on social sites, social sites drive traffic back to us. We like that traffic, either just because we like more folks reading our work, or, in the case of commercial sites like this one, because we serve ads against it.

Now, as I’ve noted many times over the past six months, this bargain is breaking down, because it’s getting harder and harder to monetize traffic using standard display advertising units. That’s not Facebook’s problem, per se, it’s ours. (See here for my suggestions as to how to solve it).

Nevertheless, for many sites, the spectre of losing significant traffic from Facebook means a serious blow to revenues. And from the point of view of the Dangerous Minds blogger, Facebook first cut his traffic off, then began asking him to pay to get it back (in the form of promoting his posts via Sponsored Stories).

This makes for a very good narrative: corporate greed laid bare. It got picked up by a lot of sites, including Ars Technica and even the aforementioned George Takei, who is upset that he’s lost the ability to push his posts to all 2.9 million of his Facebook fans.

Turns out, the truth is a lot more complicated. I’ve done some reporting on this issue, but not nearly as much as TechCrunch did. In a follow up to the Dangerous Minds story, TechCrunch claimed to have debunked the entire story. Titled Killing Rumors With Facts: No, Facebook Didn’t Decrease Page Feed Reach To Sell More Promoted Posts, the story argues that Facebook didn’t change its algorithms to drive up revenue, but rather to cull “spammy posts” from folks’ newsfeeds.

Facebook has always shown just a percentage of all possible posts in a given person’s newsfeed. Anyone paying attention already knew that. The company uses its Edgerank algorithm to determine what it thinks might be interesting to an individual, and sometime in the past few months, I can confirm through sources which wish to remain anonymous that Facebook made a pretty significant change to Edgerank that penalized posts that it felt were not high quality.

Of course, that begs the question: How does Facebook determine what “quality” is? The answer, in the main, is by measuring engagement – is the post shared, liked, clicked on, etc? If so, then it is seen as quality. If not, it’s demoted in value.

Is this sounding familiar to anyone yet? In short, Facebook just executed a Panda.

I held back from writing anything till this predictable cycle played out, because I had a theory, one that I believe is now confirmed: Facebook is now making its own weather, just like Google, and in the past couple months, we’ve witnessed the first widespread instance of a Facebook weather event.

For those of you who don’t know quite what I’m talking about, a bit of history. Ten or so years ago, the ecosystem around search began to notice shifts in how Google drove traffic around the web. Google would make a change to its algorithms, and all of a sudden some sites would see their traffic plummet (other sites sometimes saw the opposite occur). It seemed to those injured that the only way to get their Google traffic back was to buy Google AdWords – corporate greed laid bare. This story played out over and over, to the point where the weather events started to get names, just like hurricanes do. (The first was called Boston).

Early last year Google made a major change to its algorithms that penalized what it believed was lower quality content. Dubbed “Panda,” the changes targeted “content farms” that cranked out SEO friendly pages as AdWords bait. This had dramatic effects on many sites that specialized in “gaming” Google. It also hit sites that weren’t necessarily playing that game – updates like Panda often create collateral damage. Over time, and as it always does, Google fine-tuned Panda until the ecosystem stabilized.

I believe that Facebook is now learning how to manage its own weather. I don’t know the Dangerous Minds website well enough to know if it deserved the drop in traffic that occurred when Facebook had its Panda moment. But one thing does strike me as interesting to note: A significant drop in traffic means a particular site is losing audience that has proactively decided to click on a link inside their newsfeed. That click means the person leaves Facebook and goes to the the Dangerous Minds site. To me, that’s a pretty serious sign of engagement.

However, one might argue that such a signal is not as important to Facebook as internal ones such as “liking” or “sharing” across the Facebook network. To that end, I am sure we’ve not heard the last round of serious grumbling that Facebook is gaming its own Edgerank algorithm to benefit Facebook’s internal goals – to the detriment of the “rest of the web.” Be they publishers or folks like George Takei, who after all wants to push his Facebook fans to any  number of external links where they might buy his books or sign up to meet him at the next Comic Con, the rest of the web depends on “social traffic” from Facebook. The question is, should they optimize for that traffic, or will their efforts be nullified in the next Edgerank update?

Facebook is learning how to tread the delicate line between its own best interests, and those of its users – and the Internet That Is Not Facebook. Google does this every day – but it has a long history as a distributor of traffic off its main site. Facebook, not so much. Over time, the company will have to decide what kind of a relationship it wants to have with the “rest of the web.” It will probably have to start engaging more openly with its own ecosystem, providing guidance on best practices and how to avoid being penalized. This is a practice that took Google years to hone, and many still think the company has a lot of work to do.

Regardless, Facebook is now making its own weather. Now comes the fun part: Trying to predict it.

On Native and Programmatic

By - November 06, 2012

Earlier this week I was asked an interesting question by Digiday. “What’s More Important: Native Ads or Programmatic Buying?” I thought the question was a bit conflated – it’s not either or. It very much depends on how you define the terms.

My response is below. Check the story for the opinions of many others in the industry as well.

If I had to wager a guess, I’d have to say that programmatic will be a larger force, but only if you take “native” to mean the native units at domain-specific platforms like Facebook, Twitter, Tumblr and the like. But it’s very important to define your terms here because in five years time, I think you will be able to buy all of these “native” units across a unified “programmatic” platform — and that platform has not yet been built. We are, as an industry, heading in that direction, and it’s a very exciting one. When programmatic merges with native and is fueled by data and a transparent, objective framework, everyone wins.

For more on this, check my earlier posts What Should the Ads Be Like? and The Evolution of Display: Change Is Here, For Good.

What Should the Ads Be Like?

By - November 05, 2012

The home page of HotWired at launch in Fall of 1994. The banners were on the interior pages.

(Part two of a series. Part one is here. The post that sparked the series is here).

When I’m asked about my views of where digital marketing is headed, I often tell an anecdote about the past. I may have told it here before (5300 posts and ten years into this blog, I sometimes forget what I’ve written), but it’s worth another spin.

The year was 1994, the place, Wired headquarters in San Francisco. As I recall it (and I’m perfectly willing to admit I may not be getting this exactly right), a small group of us were in an editorial meeting – a weekly affair that included our founder, CEO, and Editor in Chief; our Executive Editor; and our Art Director. The subject of our new “HotWired” project came up – Wired was devoting significant resources to the launch of an ambitious Internet publication – one of the first of its kind.

We were hiring literally dozens of editors and writers, convinced that this new medium would prove revolutionary. We wanted to be at the forefront of it – and looking back, I think it’s fair to say HotWired certainly was.

In any case, the question came up: How are we going to pay all these people?! At the magazine, of course, we sold subscriptions and we took advertising. That model was well understood, and it worked. HotWired had a lot of expenses, and it needed a revenue model.

This was a puzzle. At that point it seemed inconceivable to charge for access to the site (and counter productive, because we wanted as much traffic as possible.) Online, information wanted to be free – at least, that was what we believed. Without the distribution and printing costs of print, we figured subscriptions were unnecessary. So that left advertising. But as we sat in that meeting, the question remained – what should the ads be like?

This is when I spoke up with, given hindsight, what may have been a pretty bad idea. Since the late 1980s I had been a subscriber to many online services, including Compuserve, AOL, The Well, and even Prodigy, which was perhaps the worst of them all. I paid for those services because they connected me to content and communities I cared about (and allowed me to send email). But now that you could simply pay one fee for “Internet service,” the subscription was decoupled from the value proposition of content and community. Besides our belief about information wanting to be free, we couldn’t ask folks to pay twice – once for Internet service, and again for HotWired.

The Prodigy service, I recalled, also featured advertising – in the form of a very irritating, blinking, ugly banner framed at the bottom of the service’s window. You couldn’t turn it off, you couldn’t “scroll” it away (online services didn’t work that way), and it was one of the main reasons I didn’t like the service. But for whatever reason, it was the only model of advertising I had seen online that I could recall clearly. Perhaps, I suggested in the meeting,  we might put something like Prodigy’s banner on our new service, but figure out a less irritating approach?

That’s when our founder’s eyes lit up. He understood the power of a web page – it had a scroll bar! “We could put it at the top of the page,” he proclaimed, “and people could scroll it out of view!” (Please take this quotation with a grain of salt. This is what I remember him saying.) The team at HotWired took our founder’s idea, iterated it, and in October of that same year, the banner was born.

I can’t speak for others at Wired and HotWired, but personally, I want to say, with a bit of a twinkle in my eye: I’m sorry.  I’m sorry because over the proceeding two decades, we’ve managed to take the banner, place it in second-class real estate on most sites (at the top, on the side, away from the content), and train an entire generation of audience members to ignore the voice of marketers. And that was not a healthy move for the ecosystem of digital publishing.

Now, let me explain the twinkle. The fact is, the banner – and its descendants the box, the tower, the wide tower, the Rising Star, the expandable, Project Devil, the Conversationalist and on and on – these units have been very good to the web. They’ve gotten us to where we are – to billions and billions of revenue, and countless hundreds of thousands of web publishing sites driven by that revenue. It’s been a scalable, consistent, efficient platform for marketers. Federated Media Publishing, where I remain Chair, has served up banners by the hundreds of billions over the years – it now serves nearly 30 billion a month across its network.

So I’m proud of the banner. It’s been a workhorse. But as I wrote in my last post, we’re at an inflection point in the display ecosystem. Banners continue to evolve, and I don’t think they’ll ever go away for good. But if you run a high quality site that has to pay its creators, and you want to make a business of it that includes marketing as a core piece of your revenue, I believe it’s once again time to ask that question: What should the ads be like?

My answer is this: They should be like the content they support.

Now, before you scream bloody murder about the wall between editorial and advertisement, let me remind you that successful ad models have always mirrored the vocabulary, grammar, and visual nature of the medium they inhabit. Open any issue of Vogue for proof of that. And tell me whether or not the Old Spice Man thirty-second spots employ the same visual and narrative vocabulary as the shows where they appear. Truth is, television and print are storytelling mediums, and they provide marketers a scaleable place to tell a story. Yes, they also interrupt the flow of the editorial. But that’s the price we pay to insure we can access the content. Period, end of sentence. If you do not believe advertising has a right to at least a portion of your audience’s attention, you should not be selling advertising.

Until recently – and upon reflection, quite incredibly – most web publishing was based on the idea that advertising did not have the right to that attention. Relegated to the top and right rail, ads on the web moped from the sidelines, hoping that they might prove relevant enough to possibly elicit a click. Quite understandably, this pushed the entire display ecosystem to be driven by the metrics of “below the line” or “direct response” marketing. Of course we’ve innovated along the way – with page and site takeovers, expandables, and clever one-offs here or there. But while those may work at scale on a very large site like Yahoo, marketers hate inefficiency. They don’t want to make unique creative for every single site that they might wish to support. They’ll do it for large platforms that have proven return – Google, Twitter, Facebook. But for smaller content sites? We can do better.

The independent web is a fractured place. There’s no single template for what a website should look like. That’s what makes it so wonderful – and so difficult to monetize efficiently. So I’d like to offer up some recommendations for sites who want to have a profitable relationship with marketers. Some of these might strike you as going too far. And I’m certainly not suggesting we have to adopt them all. But if we want to create a lasting digital publishing industry that supports the efforts and product of talented content creators, we best adopt at least a few of them.

*First, we have to retrain our audiences to understand that high quality content costs money, and advertisers are our partners in providing that money. If you want our content free of charge, you have to give our advertisers a portion of your attention as well. That’s the deal. We’ve not done a good job of making that explicit across the quality independent web, but we must. For some more thinking on this concept, see my post on Do Not Track from June.

*Next, we need to think about designing our sites so they can accept standardized, high quality ad units that actually work for all involved. The traditional blog (like this one) is not well suited for such units, but it’s not too hard to rethink it so as to accept them. At the very least, this means adopting some standard “ad friendly” templates on our sites.  For more, see info on the NCS below.

*Third, we have to work with our marketing partners to create advertising content that measures up to the quality of the content our audiences have come to enjoy. While there’s a lot of amazing creative out there on the web, I think it’s fair to say that most creative agencies – the folks who make ads – don’t consider digital to be nearly as important as television or even print. That must change. Ads on the web need to be creatively compelling, and they need to be “native” to the environment in which they live. Publishers can help with this – see the section on content marketing below.

*Fourth, we need to give advertisers ad products that have scale, and enough of a canvas to tell that story which is native to the environment. Boxes and rectangles relegated to the sidelines check the scale box, but not the creative canvas box. Here are a few new units that I believe, with scale, give advertisers that canvas:

*The interstitial/overlay. Many high quality sites have already adopted this unit. It shows you an ad when you first land on the page, before you get to the free content. It’s often video (marketers are nuts for video these days.) It interrupts the flow of the audience member’s intent – usually he or she is coming in from a social or search link intent on reading a specific story, right now  - but it certainly checks the box for getting our attention. I think the interstitial can and should be adopted widely – and evolve to the point where it appears as a reward for engaging with content, rather than a prerequisite.

*  The Native Conversational Suite. (Scroll down to see it) This group of products – from Federated Media Publishing, so I’m clearly biased – lives in the editorial well of the site itself. Just as the ad unit at Twitter is a tweet, or at Facebook is a post, with the NCS, the unit is a piece of content that lives natively on the site. It’s clearly marked as sponsored, but it’s given the same respect and space as any other piece of content. To me, that’s a lot like a page of a magazine – it may be a story, or it may be an ad. The trick is getting the ratio, the creative, and the scale right. FM is leaning into driving the NCS across our entire network – which has a reach past 200 million in the US alone.

* The full page ad. I’ve always like the magazine model of full-page and two-page ad spread. You can quickly flip past them as you browse, but if an ad really speaks to you, you pause and absorb it. With the rise of tablet design models, I believe the time is near for the equivalent of a full page digitally-enhanced ad, similar in nature to what you see on Flipboard. It needn’t be relegated to just one app.

* The Mobile Moment. I’m calling this a “moment” because on smaller mobile devices, it’s even more true that traditional boxes and rectangles don’t work very well. Independent publishers must design our sites for mobile, and for advertising units that can appear at the right moment for both the audience and the marketer. An easy example of this is an interstitial video that appears as a player is “leveling up” during a game. For a publisher, that moment might come at the end of a story, or before a second one is chosen.

Content marketing. This could be an entire post, and probably will be, but for now I’ll summarize. Again, FM has been a leader here, and it’s a part of our business that is growing nicely. To me, content marketing is a broad category that includes a range of activities, but the short of it is this: Content marketing is a publisher helping a marketer act natively in the environment a publisher knows best – in short, helping a brand do all the things I’ve been on about above. It’s a publisher helping a marketer create content that works – that engages an audience in various ways.

If you’re going to be a serious publisher on the web, you need to devote part of your energies to working directly with marketers to help them express themselves both on your site as well as across the web in general. This is an area where FM and many others are investing significant resources. Content marketing can be as lightweight as helping a marketer create sponsored posts, or as significant as becoming a partner on a brand-driven media platform like openforum.com or makeup.com.

There are certainly other examples, but I’ll stop there. Imagine if all major publishers across the independent web banded together and implemented a few of these ideas. Then marketers would have broad, engaging canvases, great content to associate with, and that most important of check boxes: Scale.

But there’s even more publishers can do. Foremost among them is getting smart on how to leverage social platforms, and how to lever our own data through programmatic platforms. First, on social: Not having a strategy for social is akin to not have a search-engine optimization plan five years ago. Social drives more than traffic, it drives customer engagement, and just as brands can’t afford to ignore it, neither can publishers. But we have to be smart – don’t put your taproot in the soils of social, but rather leverage it to take care of your audience.

Next, on programmatic. Traditional banner inventory is already undergoing significant change, and publishers need to understand that change, and get smart about how best to navigate it. Programmatic buying is growing at double digit rates, and by some estimates, will account for more than half of all display advertising budgets within two years. That’s stunning given programmatic buying platforms barely existed just three years ago. I believe publishers need to consider who they’ll partner with on programmatic platforms, and how their data and inventory will be used. It’s going to become a crucial publishing skill to either manage your own inventory wisely, or trust a third party who shares your same interests – a partner who is on your side. Again, this is why FMP combined with Lijit Networks, and is investing so much in driving that business forward.

Within five or so years, I believe, most inventory, even the units I mentioned above, will in some way be purchased via a programmatic platform. That might leave us wondering what the people will do. Currently our industry employees tens of thousands of people who market, sell, manage, flight, optimize, and report on display advertising. There’s going to be disruption in this marketplace, to be certain, but the crucial thing to remember is this: we want to employ people to do what people do best, and machines to do what machines do best. People are very good at creating content (machines, not so much), and very good at working in a consultative fashion with marketers. They are very good at coding and tending machines. And most importantly, we are exceptional at insight.  The best publishing teams of the future are going to be partners to brands, publishers, and agencies, creating integrated, native experiences that leverage the machine’s scale and real time algorithms. The future, to me, is bright. Getting there, however, means we embrace change. Let’s get to work.

The Evolution of Display: Change Is Here, For Good

By - October 31, 2012

The first banner ad to run on the web – AT&T’s “You Will” campaign. It asked “Have you ever clicked your mouse right here?” The answer turned out to be “You Will…for a while. Then, not so much.”

 

Earlier this year I wrote a long post about the “death of display,” since then, I’ve consistently been asked about it, and in particular, to expand on my thoughts around display advertising economics, and the prospects for what might broadly be termed “independent creators of content,” or what I call “the independent web.”

Now, I love this topic, as many of you know. So in this post I’ll reprise the core points from On Thneeds and the “Death of Display”, and then riff a bit about where I see things now, and where they might be heading. Spoiler: It’s not all bad. Double spoiler: This post will be written in two parts. This is just the first.

Here’s that previous post, boiled down to bulleted form:

* The model of “boxes and rectangles” – the display banner – is failing to fully support traditional “content” sites beyond a handful of exceptions. For 15 years, independent websites have “direct sold” these units on their sites, or hired someone (like Federated Media Publishing) to do it for them. But marketers increasingly are turning away from direct-sold display units. Why? Read on….

* A new generation of “native” ad units are on the rise, which live primarily on large social sites that curate and aggregate content. Examples include Twitter, Facebook, Tumblr and of course the grandaddy of them all, Google’s AdWords. Big sites like HuffPo and fast social comers like BuzzFeed are also employing native units. Pinterest is expected to roll out something similar soon.

* With the notable exception of Google’s AdSense (which is essentially a programmatic machine, see below), none of the other large “native” platforms  help independent content creators make money, other than a “quid pro quo” deal that if those content creators engage with the platform, they’ll earn traffic back to their sites.

* These publishers hope that by accepting this quid pro quo, they will drive traffic to their site that they can then monetize with display advertising. However, as I stated before, this model is breaking down. Why?

* Because even as all those “Boxes and Rectangles” morph into far larger units, they are increasingly bought and sold in real time by machines (“programmatic buying” or “Demand Side Platforms,” also known as “DSPs” – the largest include Google’s AdX, AppNexus, and Turn).

* So far, the rise of programmatic buying  has not made it possible for most independent publishers to make enough money to create content full time. Hundreds of thousands are making money using these platforms, but if you want to run an independent content brand that employs people full time, boxes and rectangles are usually not going to be enough. Some are opting out of playing in the programmatic market, but it’s quite hard to direct-sell small sites that are not at scale. Marketers and their agencies are finding they can far more efficiently find the audiences they want using machines, at a fraction of the cost of working directly with traditional web publishers.

* If we don’t figure out better models for how to get the “content creator” paid, we risk losing the oxygen that feeds the web ecosystem. After all, what would Google, Twitter, Facebook, or Pinterest be without harvesting the hundreds of thousands of pieces of great content created every day on the web? Ditto for the DSPs, which depend on inventory created by these same independent content creators.

* At the moment, the lion’s share of digital marketing dollars and equity value is flowing to either those large content-harvesting platforms, or to programmatic platforms.

* At the end of the post, I suggest a new model that attaches value to an individual piece of content, such that the piece of content is monetized as it travels around the web, getting reposted, tweeted, shared on Facebook, pinned on Pinterest, and so forth. Such a model is incredibly difficult to create, but not impossible. I promised a follow up post.

Well, this is it (at least, it’s part one).

That took a lot to summarize, but readers know I’m passionate about getting independent content creators paid. In the past five or so months since that post was written, the direct-sold display marketplace has continued to deteriorate. Yahoo, a bellweather for display advertising, has had two more quarters of flat-to-declining display revenues that have missed Wall Street targets. In its latest earnings report, the New York Times Company noted that display revenues actually declined year over year.  We’re seeing it at Federated Media Publishing, as it has both direct-sold and programmatic businesses, and I’m hearing it from folks I speak with privately – models that depend on direct-sold “quality display” are under increasing pressure.

Meanwhile, business is great for the two platforms I outlined above. Programmatic buying platforms are seeing double and triple digit increases in revenue year over year (again, we see this at Federated, because we acquired such a business more than a year ago). As more data and insights are applied to programmatic, and better inventory secured, I  see a very bright future for this part of the market. Business is way ahead of plan at Twitter, executives there have said, and Facebook’s recent earnings highlighted the growing success of that company’s “native” advertising products - promoted posts and sponsored stories.

Unfortunately, neither of these two high-performing sectors of the marketplace help most full time independent web publishers make enough money – at least not yet.

Given all this, what is a publishing business to do? Well, as much as I’d like to say my idea of “monetized content traveling around the web” is imminent, I think that’s going to take a few years.  And while programmatic is getting better each quarter, it’s also going to take time and improvements over years before that ecosystem is fully expressed. If independent web publishers are to thrive in the near term, we’ve got to change our approach to the market. Change is scary, change is hard, but change is needed – and change is good.

How do we do it? In short, we’ve got to be far smarter about how we “feed” those platforms – making sure the value we get is equal to or more than the value we’re giving. We’ve got to be smart about how we interact with both social and programmatic platforms, and align ourselves with companies that put publishers first. And lastly, we’ve got to rethink how we bring high-touch marketing onto our sites – we need to more rapidly adopt new advertising products, new architectures for our sites, and a deeper understanding of how to partner. We can no longer relegate marketing to second-class real estate. If high quality sites on the independent web are going to thrive, we will have to embrace change. That’ll be the subject of my next post.