Tag Archives: digital media

Free News and Faster Horses

We are going through a once in a lifetime shift in the media business, an inexorable move away from the economics that sustained ‘Big Media’ for the majority of the 20th century. From Chris Anderson’s Freemium to The New York Times erecting pay walls, the issue of paid content is about as hot as it gets right now. The underlying notion that you give the content to readers and pay for it through advertisers is going away, to be replaced with a plethora of different ideas about how it may (or may not) be possible to monetise content online.

All this in the face of multiple studies that consistently show only a minority of customers say they want to pay for content online:

  • PCUK/Harris Poll (5% of 1,888 UK adults said they would pay if their favourite online newspaper began charging).
  • Gfk (total 18% of UK adults in international survey of 16,800 said they didn’t want to pay for “content”, ie. “news,
  • entertainment and information sites such as Wikipedia”).
  • Continental (total 37% of 500 UK adults said they would pay micropayment, larger fee or monthly/annual sub for online newspaper/mag).
  • Olswang/YouGov (total 19% of 1,013 UK adults and 536 teens said they would make micropayments frequently, a subscription or otherwise pay for news articles online, on mobile or ereaders if there was no free alternative).
  • Oliver and Ohlbaum (“15 to 20% of respondents [survey of 2,600 UK consumers] said they would pay £2 a month for their favourite news website if it was the only one that charged”).
  • Forrester (total 19% of 4,711 US consumers said they would make micropayment, pay a sub or buy a bundled print/web/mobile package for online newspaper).
  • Boston Consulting Group (48% of 5,083 regular internet users in nine countries, including 506 in UK, said they would pay for online news).
  • KPMG (11% of 1,037 people aged 16 and over “currently spend anything on online media” – findings vary for different media types).

Taking all eight studies in to account, the average proportion of consumers who would pay for online content is 21.8%.

While this is interesting, it is pretty well documented that people are poor at understanding what they want. It surprises me therefore that we continue to treat these numbers as if they actually mean something about whether people will pay for content online, or whether there are workable models for paid content.

We need to start looking at these surveys with a healthy dose of scepticism.

While Rupert Murdoch seems to be treated as a sort of mad uncle of the internet currently with his “crazy ideas” to make people pay for content, in reality what he understands is that it is not a case of customers never being prepared to pay, just that they’d rather not. Sky cracked the subscription TV market in the UK with the introduction of Premiership football.

We seem to be treating a mass media meltdown as a certainty, when in fact there are still opportunities for the big players to make their existing models work – with a few tweaks. What if Murdoch included a subscription to The Times with Sky TV packages for an extra £1 per week? Give customers a workable concept and they may just sign up. Ask them to come up with the concept themselves, and they will be lost.

I would suggest checking out Bad Science by Ben Goldacre for further demonstration of how what people say is often miles away from what they actually think, or may think given different options.

A final example, and this is my favourite, that perfectly encapsulates how consumers have difficulty in really getting to grips with what they want, comes from Henry Ford, who created the mass market for automobiles. He was once asked about the importance of the ‘voice of the customer’ in his business. His reply was surprising: “If I’d asked people what they wanted, they’d have said ‘faster horses’.”

There is always opportunity for a person or organisation with strategic vision to come up with an idea that changes the game. Given a different context, people will have hugely different ideas about what they want or need.

In a world of horses, people don’t want cars. They want faster horses.

In a world of free news, people don’t want to pay.

The customer is not always right. Or better put, the customer does not always have the imagination to be right.

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Google and Trademarks

Having run into some legal problems recently with clients regarding advertising against competitor trademarks on Google, I wanted to put together a post on this issue, and the current state of play. It seems pretty clear to me that globally speaking, no case has really got to the bottom of the particular problems associated with advertising against a trademarked keyword, or using a trademark in ad text on a search engine.

In terms of context, AdWords is Google’s flagship advertising product and main source of revenue, offering pay per click advertising, and site targeted advertising for both text and banner ads. Advertisers create ads and choose keywords, which are words or phrases related to their business so that when people search on Google using one of those keywords, the advertiser’s ad may appear next to the search results.

A company can choose a trademark protected term as keyword. For example, if you enter “nike” in the Google search box, you will get listings from advertisers who paid for placement with this keyword. Google puts those listings off to the right side of the screen, clearly marked as ads.

Google started allowing advertisers to bid on a wide variety of search terms in 2004 in the US and Canada, including the trademarks of their competitors and in May 2008 expanded this policy to the UK and Ireland.

Certain trademark owners have become concerned about their brand awareness and claimed that this behaviour violates their trademarks. Google came consequently under fire both in the media and from a legal perspective for allowing advertisers to bid on trademarked keywords.

In its 2008 Annual Report, Google commented on the lawsuits as follows:

Companies have filed trademark infringement and related claims against us over the display of ads in response to user queries that include trademark terms. The outcomes of these lawsuits have differed from jurisdiction to jurisdiction. We currently have three cases pending at the European Court of Justice, which will address questions regarding whether advertisers and search engines can be held liable for use of trademarked terms in keyword advertising. We are litigating, or have recently litigated similar issues in other cases, in the U.S., Australia, Austria, Brazil, China, France, Germany, Israel, and Italy.

Courts in all these countries ahve differed in their verdicts and reasoning oncerning the potential liability of search engines, and there is still no certainty as to whether Google will be viewed as an active trademark infringer when third parties make an improper use of trademarked terms on AdWords or whether the liability passes to the third party advertiser.

Certain recent decisions by the Court of Appeal in Paris were favourable to trademark owners such as Louis Vuitton, although this is based on a history of interpretation of trademark laws in France.  According to the Court of Nanterre Google is an active trademark infringer. The mere fact of suggesting the infringement by using the mark as proposed keyword is enough. On the contrary, the court of Paris took the view that Google does not use the trademark for identical or similar products or services in a commercial manner. So there is no trademark infringement. But nevertheless Google’s conduct was not deemed legal. Google’s liability was based on the common civil principle of fault due to the lack of preliminary control to check whether chosen keywords do infringe third party rights. The Court of Strasbourg, took into account technical measures implemented by Google (a filter and links to check third parties’ rights) and excluded Google’s liability on all grounds. This decision appears however to be isolated.

More recently, Google was held liable by several courts like the Cour d’Appel of Paris in the Louis Vuitton case but Google decided to appeal the case in front of the Cour de Cassation and the proceeding is pending. Google has now lodged an appeal before the French Supreme Court and the court has in turn referred the case to the European level by sending a reference for preliminary ruling to the European Court of Justice. Courts in other jurisdictions have also asked substantially similar question to the European Court of Justice, including the Dutch courts in December 2008 and the German courts in January 2009.

Such reference for preliminary ruling, as referred to in Googles statement, has not yet been answered by the European court and it is difficult to know when the judgment will take place and whether it will help to clarify the debate. Based on several industry sources, it seems there is some heavy lobbying on the Court of Justice including from the European Commission to confirm that there is no trademark infringement from Google and that it should be free to continue its paid search activity going forward as conducted so far.

In addition to the ECJ response, it is worth looking at other decisions pending in certain jurisdictions. By way of example, a US appeals court ruled in April 2009 that a trademark infringement lawsuit against Google by Rescuecom be sent back to a lower court for trial. The Court of Appeals for the Second Circuit in New York ruled that Google should answer to the claim that it infringed upon Rescuecom’s trademarks by selling AdWords ads to Rescuecom’s competitors which appear when Google users search for phrases containing “rescuecom”. Prior to this ruling, it was believed that this issue had basically been resolved by the courts in the US in Google’s favour; there are other cases which provided some precedent for the notion that third parties like Google weren’t liable in cases like this. But that is no longer a given, and Google will have to defend itself against this trademark owner’s claim.

Another interesting case is currently pending in the UK involving Interflora vs. Marks & Spencer. The world’s largest flower delivery firm has sued Marks and Spencer at the High Court in London for sponsoring the word ‘Interflora’ as a search engine keyword. The case could be an important test of how UK trade mark laws apply to keyword advertising. Interflora’s contention is that when a user searches for the word “interfl0ra” a specific request is being made for that trademark only.

There is some UK precedent for this position. The main UK authority on keyword advertising is the Mr Spicy case in which the trade marks owner sued Yahoo! for allowing Sainsbury’s to bid on the keyword “spicy”. The court summarily dismissed the claim and found that the only use of the trade mark itself was by the search engine user. The ruling went further and opined that even if there had been use by the search engine, the use would not affect the essential function of the trade mark as an indication of origin. However the significance of this ruling should not be overstated, because “spicy”is a purely descriptive term and Sainsbury’s therefore had a legitimate right to bid on that word.

The case of Reed v Reed concerned the comparable issue of the use of a trade mark as a metatag within a website (metatags are embedded keywords within a website that are picked up by search engines during the searching process). It was found that such use was not use for the purposes of trade mark infringement, and further was commented that the web-using public are well aware that search results contain irrelevant hits and sponsored links. He thought they would not be confused and infer a trading connection simply because their search returned such a sponsored link.

Although Interflora does not need to establish that the public is likely to be confused by Marks & Spencer’s actions in order to succeed, it has brought the issue of confusion into play by arguing that, although the Marks & Spencer sponsored link itself does not visibly display the Interflora mark, Google users will infer a trading connection that is detrimental to the distinctiveness of its trade marks.

Below are listed some links to relevant articles concerning use of trademarks in search advertising online, and legal cases pertaining to this issue.

http://pblog.bna.com/techlaw/2009/02/google-adwords-in-france-.html

http://www.out-law.com/page-10006

http://www.linksandlaw.com/adwords-pendinglawsuits.htm

http://www.linksandlaw.com/news-update57-europian-court-justice-adwords-lawsuit.htm

http://blog.ericgoldman.org/archives/2009/05/another_lawsuit.htm

http://www.affiliatebestprograms.com/lawyer-files-class-action-lawsuit-against-google-adwords/

http://www.semreportcard.com/how-trademark-protection-will-affect-google-advertisers-and-users/

http://www.nytimes.com/2009/05/15/technology/internet/15google.html?_r=1

http://news.cnet.com/Google-wins-in-trademark-suit-with-Geico/2100-1024_3-5491704.html

http://government.zdnet.com/?p=4804

Wolfram Alpha on Channel 4 news

I was lucky enough to appear in a Channel 4 News package on Wolfram Alpha last Friday 15 May.

It was a great experience, and a fascinating insight into how TV news works in 2009. My 15 seconds of comment was cut down from a 10 minute interview with Ben Cohen, the Channel 4 Technology presenter.

The piece as a whole is very interesting, and it is great that Wolfram Alpha is getting such a huge amount of mainstream attention. For what it’s worth, I think Wolfram Alpha has been rather overhyped, although it is clearly a fascinating project with some big implications for all imformation providers – Google, Wikipedia and anyone else in the content curation game.

Full Wolfram Alpha TV slot and extended interview with Conrad Wolfram

Leaked FT strategy document points to the future of online news

Cutting a print edition, appointing dedicated “news integrators” and a properly articulated online news presence are all part of the Financial Times’s “Newsroom 2009” plan, detailed in a leaked strategy document which has found its way online.

The document sets out a new publishing model designed to unite its cross-media processes, and ensure journalists put online at the front end of the editorial chain in every case:

  • Reporters are expected to add links, company data, write headlines and check for length on their stories, plus build on them once online.
  • Editing desks then check everything, link the content to ready-made newspaper subbing templates, before the subs desk finish the cycle and press the publish button.

Further emphasizing online as the place to break news is the decision to replace the third printed edition in London with a later second edition.

This does appear to be a genuine web-first publishing strategy, and a step forward from the FT’s current model which holds back some stories for its print editions.

It’s worth noting that the FT already does the two things digital refuseniks are always insisting will save newspapers: they charge a subscription and they focus on quality content. But the point is that the future of newspapers requires greater change than that.

It’s pleasing to note that the FT is really getting involved in Newsroom 2009 and beyond.

Growth in Social Media Marketing interest 2009

I have just been researching social media marketing for a client presentation, and wanted to share some figures gleaned from Google Insights for Search which really highlight the growth in interest in social media marketing over the last few years.

Since 2007 searches for “social media marketing” have increased by 900%. Even from early 2008, searches have tripled.

Searches for "social media marketing" 2007 - 2009

These are huge increases, and really show the level of interest there is out there in and around social media marketing strategy.

Looking at the growth drivers from a geographical perspective shows the key early adopters were the US and UK alongside a cluster of other developed economies.

Worldwide searches for "social media marketing" 2007

Significantly, India is the only BRIC country represented back in early 2007.

Moving to 2009, we can see the remainder of BRIC coming on board alongside other core developed economies in Japan and Sweden amongst others.

Worldwide searches for "social media marketing" 2009

There is also a marked increase in interest around social media marketing from India, which demands further investigation.

Digging deeper, the majority of growth is driven by Delhi and India’s richest state Maharashtra, specifically Mumbai.

Searches in India for "social media marketing"

The social media marketing scene in India is clearly heating up, with digital advertising agencies, PR practitioners, and prominent bloggers offering a range of social media services. According to reports there are up to 25-30 serious social media players operating in the Indian market, and working across popular social media platforms such as Facebook and Twitter. It would be interesting to hear your views on why it is that India is adopting social media, and social media marketing, so quickly.

My thoughts are that in a world in which the internet is primarily a mobile medium, the services that matter are social ones. Mobile internet access is primarily about social networking, something true both in India and elsewhere. So in India, in effect, the marketing is going where the people are.

Would recommend following Watblog or Blogworks India for more insight on social media marketing in India.

The Future of Media with Martin Sorrell

I caught a very interesting discussion about advertising and the future of media last night on BBC Radio 4’s “The Bottom Line”.

Sir Martin Sorrell shared his views about some key issues in marketing and media from an agency perspective, including the future of advertising, the benefits of scale, and how long the present financial crisis may last.

Also present were the CEOs of Vodafone and Eurostar respectively, both talking about the huge impact of digital marketing and media on their business.

The key take aways were:

1. Agency revenues are increasingly tied to consulting fees, and moving away from commissions.

“What we’re seeing is clients looking for us to harness the talent that we have in more effective and efficient ways. We’re seeing clients asking us to put teams together – for example we have a team Vodafone, a team Unilever, a team Ford or whatever it happens to be – to put together the best talent to deal with the issues in the marketplace.”

2. The rise of online and the decline of traditional media vehicles.

“The average client worldwide is spending 10 or 12% of his or her budget on internet. You and I spend, according to the statistics, 20% of our time online, so the weighting should at least be 20%. By the time we get to 20%, you and I will probably be spending a third of our time online.”

The balance has shifted. So TV, instead of being a third in a normal market or worldwide, probably will go to about 15 to 20%. Newspaper and press will go to 20 to 25% with internet, mobile, video content making up the balance.

3. Customer insight is increasingly becoming a viable revenue stream

“For us, there have been three engines. One is the new markets which are now 27% of our business; second is new media or digital, which is now 25% of our business; and third is consumer insight, which we think is becoming more and more important.”

All parties were fairly bullish about digital, and the structural changes occurring in media, feeling that even as existing revenue models collapse from both an agency and publisher perspective, new ones are forming to take their place.

In many cases this has meant a greater engagement with online, although the impact of new media is being felt as much by website owners and digital agencies as by owners of traditional media vehicles.

Link to listen again and transcript.

The problem with Google (and how to sue Google and win)

Interesting story over on the Huffington Post about Aaron Greenspan, who sued Google when his site, Think Computer, got kicked off Google’s AdSense while owed $721.

After failing to get any answers as to why this had happened, or how to go about claiming the outstanding monies from Google, Think’s CEO filed a small claims lawsuit and won.

Aaron states:

Effectively, Google’s position was that it was above the law, and if not any law in particular, then at least the spirit of the law.

Not a good look. And also a shame. Because despite some of the bad press it has been getting recently, Google is still a genuinely innovative company that is pushing the boundaries of what the internet can do, and what we can do on the internet.

However, until Google buys into the fact that being good (or not being evil) doesn’t mean not being accountable, it will continue to follow the same disappointing path as Microsoft in the late 90s.

Rather than there being any sort of Google killer, will Google just end up killing itself?