Polygraph Media Blog

The Future of News is Now, and it's Tiger Teams

News media has always been an interest to me going back to my time as sports editor of my high school newspaper, The Northwestern, in 1991.  I was deeply involved, maybe even instrumental, in converting Stratfor from a consulting business to a web publisher in 1999.  And our first go-to-market strategy for Notice Technologies in 2009-2010 was to partner with local newspapers and the families that owned them.  So I have a professional curiousity about local media that I can't quite shake, even if it isn't the best business decision.

The other day, I read an update posted by my friend, Scott McKay, Publisher of The Hayride -- a Louisiana-based conservative blog that covers Louisiana & national politics.  Scott was updating his audience on traffic that The Hayride has earned, relative to its major media competitors in Louisiana.  You can check out his post here... it's fascinating.

Scott has gone from nothing to being the #2 most read media property in Louisiana in just two years.  Let that sink in for a moment.

From nothing to being #2 in his market in two years.

Some of you might say, well... I'm sure some Conservative think tank is funding Scott and his efforts.  Nope, think again.

Growth of The Hayride has been ENTIRELY organic, driven by a small tiger team of people insanely focused on developing content interesting to its audience.  And it really hasn't made significant adjustments to its original editorial voice or content.  They've stuck to it, and in turn developed a large, growing, and apparently loyal voice.

Looking around the media landscape, The Hayride is not at all an anomaly.  This era has been more or less defined by the emergence of either bootstrapped or modestly funded (initially) entities that have grown their audiences.  The Drudge Report was probably the original -- one guy curating content for the world's edification has turned into a profitable powerhouse.  Stratfor was one in the late 1990s and continues to thrive despite its recent hacking attack.  The Huffington Post and Breitbart emerged in the middle of the last decade and continue to roll.  Mashable is doing the job today in the tech/social media space.  Henry Blodget's Business Insider is reporting on business and stock market issues, but with a far smaller staff than say CNBC.  At the local level, we're seeing companies like Culturemap, The Magic City Post (Birmingham), Buffalo Rising, The Texas Tribune, and countless others challenge incumbents.  In traditional media, even the venerable Seattle P-I has moved entirely to a Web model and streamlined their team several years ago.

What's the lesson here?  Traditional media reporting is tough, labor intensive, and expensive. Opinion and analysis, on the other hand, can be a lot more inexpensive.  It doesnt' require travel, developing relationships, covering a "beat", or doing deep investigative reporting in person.  It is, however, very tough to do on a consistent basis.  Those properties who have a supremely talented Publisher/Editor who can pump out 5-7 articles per day *and stick to it* are the future winners.  We've seen it time and time again, and we shouldn't be surprised when it happens again.

And if anything, we're in an era where, counterintuitively, less money provides better outcomes for winning niche markets.  The future is being built from the ground up by tiger teams.  It's a long term play.  But if I were building the media conglomerate of the future, I'd find a way to align with or acquire a network of emergent local and vertical blogs.

Square and Facebook... two no-brainer disruptors

Sometimes, I do a better job making a point when (instead of sitting at my keyboard) I engage in a deep conversation with a colleague about things I see in the marketplace.  The give and take of conversation can't be matched IMO -- and I'm a visual thinker/learner.

I had a conversation recently about the current social media phase we are in with startups.  I sortof bucket companies in a few tiers:

• no-brainers -- companies that will exit for a massive amount of money & will have staying power.  The ones that totally redefine markets in/near them -- although their evolution could drastically change what/who they are.
• tweeners -- those that may exit for a massive amount of money, but could very well go extinct because they either don't execute well or they don't ever achieve *real* traction outside of what is fed to you by the PR engine.
• the DOA -- those that enjoy hype early but are doomed because market or economic forces will overtake them.  These are also companies that are perhaps too visionary as they are skating to where the puck will likely be in the next cycle or beyond.

I think there are two no-brainers right now -- Facebook and Square.  Facebook has been a no-brainer for a long time.  I include Square here because they have nailed product simplicity/elegance and nobody right now really threatens their ability to sign up thousands of local businesses daily.

I'd include LinkedIn with the no-brainers, but 1) they've already exited and 2) I am concerned about their lack of product innovation over the years.  They just don't have the best track record although LNKD could be significantly different as a publicly traded company.  Then again, if there is a quarterly revenue target, you may see less innovation and more quarter to quarter revenue/profit focus.

Twitter may evolve into no-brainer status with their Apple integration -- that was certainly a great move for them.  However, without that deal they were a classic "tweener" company by my definition.  Twitter has not graduated to mainstream usage, although every major media outlet mentions Twitter in an attempt to relate to younger audiences.  I also suppose you can get tweets from just about any celebrity today.  But Twitter otherwise is not a no-brainer deal -- something that appeals to the mass market and is used regularly by the mass market.  It's a high bar, I admit.

All of the location-based services are "tweeners" to me or worse, although I like recent moves made by the market leaders.  None of them have proved repeated usage, but if they do, they're golden.

You'll have to talk to me privately about "DOA" companies -- I simply won't mention any here in the Notice Technologies blog. ;-)

How do you evaluate what is truly interesting and what is hype?  For me, it's pretty easy at the moment.

Lessons Learned from the SMB "segment"

Having worked in the SMB segment with a variety of newspaper partners over the last six months or so, I thought I'd share some thoughts on what we've learned from the small & medium business "segment".  I use air quotes for the "segment" because it is more like a catchall... a bargain bin at the grocery store where you're as likely to find onion powder as an overstock of mango chutney.

Lesson #1 - small and medium sized businesses really are not a "segment" but rather share the economic commonality of being more or less owner operated.

Many of these small businesses are successful outside of the context of the Internet.  The business owner opens a retail store on the right corner.  A restaurant has the best salsa in town.  A plumber is on call all day, every day, and has a great reputation for providing excellent service even on holidays.

Lesson #2 - Internet marketing makes a lot of sense for small and medium businesses, but it isn't what built many surviving businesses.  So it is a "nice to have" and not a "must have" for many established SMBs.

New businesses have a lot to gain by using social media and internet marketing as promotional vehicles.  There's a reason mobile food trucks use Twitter aggressively.  New businesses get a ton of response from things like Groupon.  Awareness is the sweet spot for SMB internet marketing and social media today because the business owners are motivated.

Lesson #3 - Motivation matters, and it's a lot easier to sell an immediately effective solution to a needy customer.

Finally, simplicity and ease of use matter.  For many SMB owner/managers, the ease of use bar is extremely high and probably beyond what most software people should expect.  This brings me to an interesting point -- it is almost impossible to market "software" to local businesses.  If you ask a SMB owner/manager what they want, odds are they won't tell you that they want "software".

As such, our business continues to evolve... smarter and more effective than ever.

 

Forbes article on local business marketing going social

Howdy everyone - today Forbes published a summary of my thoughts on local business marketing. Paraphrasing, I really do believe that local businesses are being forced to develop a core competency in internet marketing across major channels -- e-mail, social media, search, etc.

The full article can be found here:  http://www.forbes.com/2010/09/17/facebook-small-business-technology-marketing.html

Companies that get it are killing it, and those that don't will suffer.

Have a great day everyone.

5 Ways Facebook Places Changes the LBS Game

I think just about everyone in the local advertising halo is digesting Facebook's announcement that they are jumping into LBS with two feet.  The LBS folks knew this was coming, yet the proposed "co-opetition" still scares the hell out of them.  In fact, I brought up this very point at a panel in May with Josh Williams of Gowalla.  The entrance of a major player with a HUGE audience is a massive gamechanger for the startups that popularized things like check-ins, mayorships, location-driven game mechanics, etc.

If rival tech giants such as Google, Yahoo, AOL, Microsoft, and Apple haven't considered Facebook a competitor yet, they're probably now realizing that, yes indeed, Facebook is perfectly willing and able to compete in the local advertising arena and they're a major, major threat.

Overall this is obviously a really big deal and a seismic shift in the LBS business, in local advertising, and perhaps in social networking in general -- although it will take several years to play out.

In May, I shared some thoughts about LBS on Mashable and followed up here on my blog.  I thought I'd spend a few minutes today talking about what I think the latest news means for the sector:

1) LBS startups forced into building an ecosystem like never before -- I have written before about how LBS startups have been riding the wave of popularity & innovation but have also to some degree tried to control how third-parties interact with their systems.  For instance, even today only foursquare allows write access to their API.  LBS startups are not by any means dead -- in some circumstances they will remain the "consumer front end" for LBS.  But to stay relevant, they will need to be a lot more aggressive fast about building an ecosystem that helps justify themselves long-term.

2) Legitimacy to LBS -- LBS startups have done a great job of exciting the early adopter market and showing the world the possibilities of local, mobile services.  But none have yet made it to the mainstream.  Why?  Because it is a HUGE undertaking.  Reaching moms in Kansas is just tough.  Facebook changes all of this significantly because they have such a huge audience.  150 million+ people are on Facebook Mobile and over 500 million experience Facebook on the Web.  Now those are mainstream audiences.

However, I do think that this is a situation where the "rising tide raises all boats."  This will legitimize the existing LBS startup players as well.  In fact, I think in the short term foursquare, Gowalla, MyTown, and others will experience growth.  The bigger question, of course, is the long-term impact for the LBS startups.

3) Facebook, the aggregator -- With this move, Facebook aims to be the center of all location-based activity.  The existing players are presently invited to "read" data from the Facebook Places API but will also be allowed to write data to Facebook.  What a great way for Facebook to build a robust database off the backs of the startups that popularized the sector.  I think the golden rule needs to be changed from "he who has the gold rules" to "he who has the users rules."

4) Twitter, the afterthought -- Twitter just gets a little more marginalized each day.

5) The Cold War begins in earnest -- There is absolutely NO WAY that this move will go unchecked by Google, Apple, Yahoo, AOL, and other major players who are eyeing the location sector.  To some degree, this move really forces relatively quick action by these companies who will need to do something to be relevant.  Otherwise, Facebook will own it.  I suppose you can argue that Facebook is already well on its way -- they have the audience, they are about to have a ton of data, and they've delivered an immersive experience to users so far.

We live in interesting times, that's for sure.

The Travelling Road Show

The job of a CEO is never easy -- but it's been particularly challenging over the last few weeks.  Travel has picked up significantly as we get more and more traction.  Our core business -- helping local newspapers and new media sell relevant advertising systems to small and medium businesses -- is booming.  We've had a few soft launches this summer with more in the works right now.

Overall I think that many local media companies and newspapers are beginning to realize that the SMB segment is indeed a moneymaker.  It just requires a few things to work well:  product, price, value for the consumer & local business owner, and probably most importantly -- sales team engagement & readiness.  In that sense, our engagements with local media have been a TRUE partnership -- requiring and depending on both us and the partner to execute.

Anyway, I've had a few customer/partner visits and a lot of engagement with local business owners around the country over the last month or two.  I won't use this forum to share all the feedback from them, but I can tell you that the advances of the last few years (self-serve, social media, group purchasing, etc.) have really empowered business owners.  I don't get the "fear, uncertainty, and doubt" I got when we first started talking to local businesses back in 2004!

Newspapers & Local Media Fast to Adapt?

Interesting article today from The Economist about how newspapers are modernizing operations, making cutbacks, and gearing up to compete in the 21st Century.

Popular opinion is that local media has not adapted to new technologies.  Certainly, reaction has been slow in a lot of places.

That said, this article communicates a contrarian point that jives with what we're seeing in the marketplace.  Old media has certainly awoken to the realities of new media, and are now aggressively adding new offerings to their product mix on both the editorial and advertising sides of the house.  They're running leaner and stronger, and I expect that (like the purported demise of the music business) we won't see the fall of local media either.

It was only a matter of time for big media to begin to make sense of it all, and we're just now seeing it.  Expect more here.

Is Local the next bubble?

With today's announcement of Gowalla's $8.4 million Series B investment, I think you can qualify "local" as the new "black" in the tech field. 

Clearly the opportunities are significant -- the newspaper business is being modernized, old business models are failing and being replaced by new ones, advertising is becoming increasingly mobile and social, and the long tail of local services has not yet been modernized & put online to the point that it will in coming years. 

Mobile GPS is spawning location-based services that will likely be a critical part of the portfolio of products and services for the tech giants moving forward.

So the trend continues -- who knows what is next?  All I know is that it is an interesting place to be, and it's where the action is at the end of 2009.  We're having a great time with it at Notice Technologies, and we'll have some very interesting things to announce at the start of 2010!

Proposed SXSW Panel - The Future of Big Media

I have submitted a panel for SXSW Interactive to cover how big media is responding to the lightspeed changes in journalism, local news, hyperlocal, etc.  Check it out here:

The Empire Strikes Back: How Big Media is Responding to Disruption

I have lined up some top-notch panelists who understand the issues far better than you'd think.

Feel free to vote early and often ;-

Microsoft & Newspapers/Local Media - more alike than you'd think

A few weeks ago it occurred to me that, at least conceptually, I have seen the problems faced by the newspaper industry before... at Microsoft.

Both face classic Innovators' Dilemma challenges.

Microsoft is trying to hang on to huge annuity streams from client software, which is a tougher business than ever in 2009 and one that isn't getting any easier.  So Microsoft is forced to straddle the fine line between hanging on to the client and "Modernizing" with Web business models, which I've argued for some time are at least a mildly deflationary force thanks in large part to Google.

The newspaper/local media business is in exactly the same place.  Old advertising models, which are today characterized by inefficiency and questionable effectiveness, are becoming less and less popular with advertisers.  Everything is moving to the Web, where monetization is similarly questionable.  Better monetizing the Web is critical to the future of the newspaper/local media industry, yet it can't quite replace the revenue provided by the old business model.

I suspect that Microsoft and Newspapers/local media businesses will find that the easiest path to success is in being aggressive... by devoting a meaningful but not overwhelming % of available resources to experimentation.  Take two examples I am very familiar with for example:  work done by the Austin American Statesman around Twitter, and alternative Web properties and the Dallas Morning News around "big media" hyperlocal.  These are organizations that place a premium on learning and experimentation -- two major keys to getting the Web.  Veterans in the Web business know that experimentation pays off with serendipity.  You don't know where your experimenation will pay off, but you commit to the process because you know that it will eventually create business opportunity & create shareholder value, even it isn't immediately apparent.

So if you're looking to see how things will go for these incumbent businesses challenged by disruption, pay close attention to signs of experimentation and innovation.  Typically, a success story or two are right around the corner.