Ad-Supported Model, Harder than You’d Think— (LightSpeed Venture Partners Blog) This Silicon Valley VC runs several scenarios, each with the moral: You have to generate a LOT of page views to reach $50m in ad revenue. CIQ: Many good points. Another consider: Many sites are destined to be sold (Reddit, NeoPets, YouTube) to beef up established companies weak in digital. “In the last year, Viacom spent about $1 billion buying Web sites specializing in games, user-generated content and other entertainment likely to be popular with its young audiences.” (NYT 3/19) 

Can Media Companies Compete with You Tube?–(NYT) Viacom’s web properties have a quarter of YouTube’s videos and a third of the audience. But they are trying to build up both to compete. CIQ:Yesterday’s NYT Viacom/YouTube article suggested the two companies were negotiating.

J&J Makes Huge Digital Ad-Spend Shift— (Ad Age) A $250 million drop in traditional ad spending last year corresponds with the 20% increase in non traditional that experts expect this year. CIQ: From the movie Innerstate to BabyCenter.com, this giant is turning its back on old ways of advertising.

 

Girl Scouts on My Space— (Chicago Tribune) This article asks the question: If Thin Mints has a MySpace profile, has social networking jumped the shark? CIQ: Evidently Thin Mints only has only 200 friends. When it comes to digital media, marketers are always looking for the Next Big Thing, often without regard to results.

Podcasting to Quadruple in Next Four Years–(eMarketer) The report preducts that by 2011, ad revenue on podcasts will reach $400 million with an audience of 55 million. CIQ: It’s an opportunity for publishers of all content (book, video, text) to get their feet wet and learn how to repurpose content for this new medium.

Hachette Filipacchi & Rodale Up the Ante–(AdAge) Publishers announced an alliance with Brightcove to provide video on online titles. “Although most publishers probably would have been happy to remain in the print business for the rest of their lives, the changing media landscape has compelled them to figure out video, too — or risk losing consumers.” CIQ: The cry we hear from print publishers, “Don’t take away my print.”  Moves like this increase the stakes for publishers who choose to stick their heads in the sand.

Viacom Sues Google over YouTube–(NYT) Asking for more that $1 billion in damages, the Viacom suit states that clips of its copyrighted content from the Simpsons to Jon Stewart have been viewed on YouTube more than 5 billion times. CIQ: Google continues to say that it is investigating filtering technology. While legal experts are “split,” it’s hard to imagine how this will turn out different from Napster unless Google & media companies take steps to work together.

Lack of Talent Slows Digital Revolution–(WSJ) A talent dearth is the single biggest problem facing Madison Avenue, says Rick Boyko, former creative head at Ogilvy and now university professor. He says the ad industry used to invest in educating itself– an era that is over. CIQ: We have to ask, if you were a young person, sparkling with drive and creativity, would you head to a traditional agency these days instead of, say, Google?

Ads Off the Rack–(Media Post) Spotzer is the newest entrant into a category that includes Pick-N-Click Ads, SpotRunner, and Cheap TV Spots. The idea is to provide a library of customizable, rentable B-roll. Fees come from both rental income and media placement. You can upload your own voice over. CIQ: Agencies may lose a significant part of the mid-market to this kind of action. These videos can be rented for under $1000. The next people to beware are studios.

All Human Knowledge, But Not Really–(NYT) Libraries have digitized huge amounts of their collections– rare books, letters, images– because the new generation of researchers prefers, even expects, to be able to research online. But, there is simply not enough money to pay for everything to be scanned, with the result that, “entire swaths of political and cultural history are in danger of being forgotten by new generations of amateur researchers and serious scholars.” CIQ: True research still has to be done the old-fashioned way, with a visit to the stacks.

Former Disney CEO to Launch Web Shorts–(Media Post) Eisner is backing Vuguru, a production company that will produce 80 episodes of 90 seconds each entitled Prom Queen. CIQ: We believe this kind of scripted, serialized short content in video, audio and text will emerge as a popular new form.

iVillage Languishing at NBC–(AdAge) The web property was to be the star of the new digital strategy at NBC. But traffic is stagnant and there has been little effort to upgrade the community elements of the site. CIQ: Old media companies can’t just buy it. They need to get it.

 

We’ve heard coming for years. First we discerned the slow crack as media began to fracture into countless shards. Then, there was the Perot-esque sucking sound of consumers leaving traditional media for digital. Next, a hiss like air being let out of a balloon, as the incomparably measurable digital medium showed advertisers their ROI, and and the ad-dollar bloat began to deflate. Finally, the disorganized cacaphony of content producers (reality TV) and advertisers (Boston ad stunt) trying to hold their ground.

Then, there was the warning bark of the consumer: No more calls at dinner time (do not call legislation)! No more commercials (Tivo)! And now, No more junk mail (today’s news with a dozen states preparing do not mail legislation)!

Content producers and advertisers had better cock an ear to the distance, because the sound is getting louder. We need to heed, above all, the golden rule of media. Serve content and advertising unto consumers as you would like it served unto yourself. Consumers are not greedy visigoths. They are human. They know that content costs money. Present them with a choice and a value proposition, and they will pay.

It a simple formula: Ad-free content costs $X. Ad-sponsored content is free. We won’t shove ads down your throat, into your mailbox, over your phone, inundate your inbox. Instead, we will offer you the choice of your ads. Like cars? Like cosmetics? You got it. Don’t like any of it, you can pay to be free.

There’s an old phrase in retail, “Live by price, die by price.” It’s been shown again and again that consumers are interested in more than just price, including “free.” Take the last Harry Potter movie. $400 million at the box office. And everyone knew 120 days later, it would be on sale. But they went anyway. Take convenience stores– a category created single-handedly by supermarkets who put the milk in the back. People will pay more for a gallon of milk if it is just convenient.

For advertisers and content producers, the maxim has transformed: Live like pests, die like pests. The peskier and more persistent we become, the more consumers will swat at us like flies. Consumers are forming a powerful herd. Put your ear to the ground and you can hear the rumble. It’s time to listen, or be run over.