April 24, 2008
Newspaper Obituaries
My home is under a primary flight path of a critical-care helicopter used to transport accident victims and patients who are banging on death’s door. The sound made by the rotors and turbine engine are very distinctive, and each time I hear it zooming overhead, I say to my kids, “Someone is dying.” It is a grim reminder of the reality of the moment.
You are tuned into the newspaper industry if you are reading this. Listen for a moment. Can you hear the whine of the turbine engine and the menacing buzz of the rotor wash? I can tell you as a colleague who has produced a weekly syndicated column - AsktheBuilder.com - for going on 15 years, the newspaper industry is circling the drain and is on life support. Do you fear for your job or perhaps your pension? You should. Unless newspapers across the land react immediately, I predict the newspaper industry will suffer the same fate as the buggy-whip manufacturers.
The good news is that it is possible to save the newspaper industry, and I truly believe I have one method that will work. The solution is surprisingly simple. Each newspaper in the USA must do a better job of taking the pain away in their readers’ lives. Pain you ask? What pain?
Everyday you and I feel varying amounts of pain as problems pop up in our lives. Maybe your roof has a leak or a drain backs up. There are countless problems that come up each day that might have to do with transportation, health, finance, legal, etc. The businesses that provide the solutions to these problems can often be found in each town and city across the USA.
Like it or not, but the Internet is fast becoming a place where messages, content and instructions are being consumed via video instead of the traditional written word. I can show a building or remodeling process in a video in less than five seconds that might otherwise take me 500 or 1,000 words of text to describe.
Video is also far more engaging, as it triggers a deep-seated survival response within our core DNA. When the image on a TV or monitor screen changes, our brains scan it to see if it is a perceived threat. This is why many people watch TV like zombies.
Newspapers need to become the hosting websites for tens of thousands of short videos that show people how to solve problems. Many papers are using the print version of the paper to drive traffic to online video, but the videos that I frequently see on these websites rarely have shelf life. So what if I can watch a building on fire from last night. Who cares about that next week? But if I knew that my local paper’s website had thousands of videos about cooking, health issues, financial tips, car care, etc., I would start to look there first to see if a local merchant attached to the video might be available to help solve whatever issue is currently on my radar.
Can you imagine how many local roofers in your town would love to buy an ad in or around a video on your paper’s website that showed homeowners the correct way to install shingles? Do you think just one local roofer would pay a meager $5 a day to have an ad in or adjacent to the video? What happens if you had ten ad slots and were collecting $50 per day per video?
Here is the best part in my opinion. The newspaper model for years has been about producing a product with very little shelf life. I would say the average edition of a paper has a useful life of six to eight hours. Look how much work goes into producing something that becomes a bird-cage liner just 24 hours after it is printed. Some might say that is insanity.
The new model I propose is the exact opposite. A newspaper loads a video or thousands of them just one time, and each day that video is watched hundreds or thousands of times by the people in that city and perhaps other cities. Once loaded, the only work required to sustain the content is a sales force to sell the ad inventory. The newspaper, of course, would continue on its mission to report on real news as it currently does. My proposal just broadens the scope of the archived content.
Do the math. Let’s assume that a paper licenses a library of just 1,000 videos across a wide variety of topics. When the ad inventory is sold out, those videos might generate $50,000 per day and some number north of $18,000,000 per year. What happens if the paper licenses say 5,000 videos? Crazy you say, but I am here to tell you this is about to happen.
The advertising standard for Internet videos is about to be adopted. The Interactive Advertising Bureau in New York City is helping to lead this initiative. When the standard is set, you will see tens of billions of advertising dollars divided up by websites that are hosting informative videos that solve problems and instruct people how to save time and money.
I urge you to react. Why? Because the television stations in your market are already familiar with video and hosting it. Will they grab the advertising dollars before you? Will your newspaper get its fair share of this enormous ad-revenue stream or will the following epitaph be on your paper’s gravestone: “Coulda, Woulda, Shoulda”.
April 20, 2008
Online Video Advertising
If you paid attention during your high school or college Economics class, you undoubtedly were exposed to the axiom of supply and demand. Video advertising must abide by this law just as a falling rock obeys the law of gravity. We are about to witness a classic lab experiment of the economic law of supply and demand, and it will give any economics professor who is monitoring the online video advertising world enough lecture material to last a semester, maybe two.
Currently there are billions of video-advertising dollars sitting on the sidelines waiting to stream into the Internet marketplace. Part of the reason, in my opinion, that the dollars are not already flooding into the marketplace is the absence of an Internet Video Advertising Standard.
We have had an advertising standard for regular network television broadcasts for many years. Many might agree that the standard is a 30-second commercial that plays at the beginning or end of a show. It makes perfect sense for the ads to play at these positions as both spots take advantage of deep-rooted psychological triggers that are hard coded into the human brain. Tuning in early to a show pulls the scarcity trigger as the viewer does not want to miss out on any of the programming. Watching the ads at the end of the show is a reciprocal response since the viewer was allowed to watch free programming.
Ask Randall Rothenberg, the President and CEO of the Interactive Advertising Bureau, and he will tell you that the accepted standard for video advertising online has not yet been cast in stone by the industry. We are close, but not quite there. Some of the things that are part of the standard and must be decided are:
- length of a video ad
- type of ad
- how many ads within a given video
- manifestation of the ad (overlay, preroll, postroll, interstitial, etc.)
- behind-the-scenes high-powered metrics for measuring ad effectiveness
- cross-platform ad buying allowing an advertiser to buy multiple websites at one location
Once the online video advertising standard has been accepted by the marketplace, I predict a green tsunami of cash to wash across many of the websites that host great video content. The advertisers will be looking for high-quality video that is contextually connected to their products. The videos that offer solutions to everyday problems will do well. The ads that appear with these videos will be accepted by the viewer as helpful additions to the content.
Let’s talk about this in the world that I work in each day. My AsktheBuilder.com videos might appeal to any number of large brand advertisers. For example, consider videos that would be in my Plumbing category for just a moment.
As soon as the advertising standard is decided, the marketing manager at Kohler might call the ad-sales department at YouTube and purchase all of the ad spots in the AsktheBuilder.com videos that have anything to do with plumbing fixtures and faucets. This is very likely as Kohler has the budget to do this.
Moments after the deal is struck, the phone at YouTube rings again. But this time it is Moen calling. Moen is another powerhouse plumbing faucet manufacturer. Unfortunately, YouTube tells the Moen ad buyer that all of the ad inventory is sold. Moen reacts by finding another video-hosting site that features AsktheBuilder.com videos.
Oh, we are not finished. What about Delta Faucets, Elkay, American Standard, Price Pfister, etc.? Where will these companies buy video ad space to showcase their products within plumbing videos? My hypothesis is in videos that are hosted on other video-hosting websites scattered across the Internet.
There are at least two major dynamics at play in this situation. The one is the supply of high-quality video content and the other is the number of different places where this content is playing in syndication. In both cases the owner of the video content is sitting in the driver’s seat. The owner of content on the Internet is king. I was quoted as saying that in the best selling book StrikingItRich.com by Jaclyn Easton. But a colleague of mine said just a few days ago that the owner of video content is going to be the king of kings. Having survived on the Internet since 1995, I have to agree with this statement.
In the meantime, I suggest you move to high ground to watch what happens when the green tsunami crashes ashore.
