From examples of the evolution of traditional media and less-than-positive news from Facebook, to new Google initiatives and the end of the DVD wars, it was another busy news week.
Newspaper websites draw younger audiences
In a study released this week, Scarborough Research reported that newspaper websites “are reaching elusive younger readers...giving a much-needed boost to the ailing newspaper business”.
It also noted:
"The growth of online audience is mitigating the decline in print readership somewhat, according to Scarborough, which says online audience growth offset losses in print by 28%. However, 70% of visitors to the Web site also read the print publication, suggesting opportunities for cross-platform ad messages."
Following upon the news that newspaper websites are attracting record audiences, it should be increasingly evident to anybody with common sense that, while the newspaper business is facing major challenges and has to adapt, proponents of the death of the newspaper are wrong.
To paraphrase Matthew Ingram: just because newspapers aren’t getting 30% returns on invested capital the way they used to doesn’t mean they’re dead.
Marketers losing confidence in TV
A recent survey by The Association of National Advertisers (ANA) and my favourite research firm Forrester Research shows that “sixty-two percent of marketers believe traditional TV ads have become less effective during the last two years”.
Because of this, marketers are increasingly experimenting with other formats and 87% of the respondents to this survey indicated that they plan to spend more on web advertising in the coming year (hopefully they think twice about social media marketing).
Interestingly, however, media agencies are adapting and ANA president Bob Liodice stated:
“As marketers embrace the richness of new advertising avenues outside of the traditional TV format, the TV industry is working to address marketer's issues related to ratings and the changing TV landscape.”
Eighty seven percent of those surveyed “believe branded entertainment is the key to TV advertising in the coming year,” highlighting the fact that the television business, like the newspaper business, is evolving, not dying. Evolution isn't always a painless process.
Facebook sees first dip in UK users
Facebook, which has seen a meteoric rise in the UK over the past year, saw its UK traffic decline for the first time between December and January, according to Nielsen Online.
Facebook’s 5% decline was mirrored by MySpace, while Bebo saw a 2% drop. Whether this is part of some seasonal cycle or a larger trend indicating that social networks may be losing some steam remains to be seen. One thing should be obvious, however - popular social networks cannot grow forever.
The UK traffic decline was the second piece of negative news related to Facebook this past week.
Earlier in the week, it was announced that Facebook’s chief revenue officer, Owen Van Natta, will be leaving the company next month. Van Natta, who wants to run a company, put together some of Facebook’s biggest deals, including its advertising relationship with Microsoft under which it is reportedly guaranteed payments that account for a significant amount of its revenues.
In an interview, Van Natta stated that he felt he had done all he could do at Facebook. Given the company’s leaky financials, I find this amusing. I think its hard to spin Van Natta’s departure in a positive light.
Even though he probably really does want to find a CEO role and is certainly leaving with a decent chunk of vested stock options, when the chief revenue officer of a company calls it quits at a time when more people are questioning that company’s ability to generate revenue, it simply looks bad.
All Hollywood studios now lined up behind Blu-Ray
The six major Hollywood studios have settled on the Blu-ray DVD standard, ending the DVD format war that was eerily reminiscent of the VHS-Betamax war.
While the studios and manufacturers tout consumers, who will supposedly receive a “much richer experience,” as the primary beneficiaries of this victory, I think the real winners are the studios and manufacturers who will reap the financial rewards as consumers upgrade their existing video collections and equipment.
Personally, I think all of the hoopla about high-definition television and video is overblown. I’m just not excited about getting such definition that I can determine if Ben Affleck really is wearing a wig as rumoured.
Google ventures into health records biz
According to the Associated Press, Google is set to test a health records system that will have it “storing the medical records of a few thousand people.”
Rumours have circulated about Google’s foray into this area of business and the fact that it appears to be moving closer to launching a product is certain to spark discussion and debate about the privacy implications.
As noted by the Associated Press, medical records stored in Google’s system may not be protected by HIPPA regulations, opening a can of privacy worms.
The most interesting part of this article for me, however, was this observation:
"It's not clear how Google intends to make money from its health service. The company sometimes introduces new products without ads just to give people more reason to visit its Web site, betting the increased traffic will boost its profits in the long run."
It’s quite funny that this is a strategy continually implemented by the company Fast Company recently named as the most innovative in the world. Given the privacy issues and Google’s inability to achieve significant financial success with products outside of search/search advertising, I’m betting against its ability to make a splash in the medical records business.
Google extending InVideo Ads to AdSense Net
Google has started to expand the overlay banner and text ads that it uses on YouTube videos to its AdSense network of publishers. These InVideo Ads are initially being rolled out with publishers such as VidShadow, Mondo Media and JoeCartoon.
Obviously, this move was a no-brainer for Google but it will be interesting to see how it pans out.