It’s not enough for media businesses to be a one-trick pony any more. Outside of the rare Nordic publishers who got into online classifieds early, there are few companies of significant scale who can sustain themselves only through advertising.
While some have gone the business information route, like Skift and other companies in high-value verticals like travel or fashion, an increasing number of media companies are placing their faith in e-commerce.
Put simply, organisations like BuzzFeed and Refinery29 are betting on the relationship with readers and ecosystems they’ve created on their own sites to sell products. There are a number of ways publishers are going about that, whether it’s
In a recent blog, we looked at the threat Brexit represents to the future of the UK creative industries, focusing mainly on the games industry – and for a very good reason: the UK games retail market is now a £3.35bn industry, its sales now almost equal to that of home sales for music and video combined.
But this blog perhaps missed the wider, refreshingly positive story about the state of the entertainment market as a whole. For many years, reports have suggested
Viagogo’s decision this week to snub the culture committee’s hearing into secondary ticketing was misguided and likely to imperil efforts at self-regulation.
The secondary ticketing market, which includes online marketplace sites like Viagogo and GetMeIn!, is worth an estimated $8bn a year.
While useful to genuine fans, these sites also make it very easy for touts to sell tickets at hugely inflated prices – and that, in part, is one of reasons why the committee was keen to take a look at the industry.
A colleague was recently sharing a cab with a senior sales director working for a traditional broadcaster and was amazed he had no idea of what affiliate marketing was.
It’s perhaps not as uncommon as my colleague might have thought, and many of our readers might be in a similar position. So, to spread a little light, here’s a simple explanation (those of you in the Affiliate Marketing world, turn away now!):
The proposed acquisition of LinkedIn by Microsoft raises an interesting question: how much would you pay for your audience?
As I noted in an earlier blog, predictions have a habit of making you look foolish: but the $26bn valuation for a business with $3bn revenue and no discernible profit looks optimistic, at best. Given Microsoft’s earlier forays into unchartered waters (Nokia, Yammer) it would be best to view the move beyond its core competencies with caution.
LinkedIn is not dying: but a decreasing habit among its users suggests that it is not reaching the parts that other social media cannot reach.
It seems barely possible, but it’s less than a decade since Amazon boss Jeff Bezos ordered his lieutenants to build the world’s first mass-market e-reader. The original Kindle was introduced to the public in 2007 and with it came the fear that its development marked the beginning of the end for printed books.
In the nine years since its launch, Kindle has been through eight generations, an LCD version has launched, along with various adaptors and applications that allow Amazon’s content to run on the slew of other platforms and technologies than have also come to market in this time.
Yet despite the digital explosion that has taken place, despite the consumer’s readiness to ditch old technology for new (honestly, when was the last time you read a printed newspaper?), and despite 2007’s fear for the future of the book, the situation we currently find ourselves in isn’t the one book-lovers feared.
2016 marks twenty years since I became a headhunter. While that makes me feel incredibly old, it has been a fascinating time to be an observer of the media landscape across the UK and beyond.
When I first started, the internet existed, but was a hard-to-use and limited resource with dial-up access. Email also existed, but not in my office (we relied on faxes). Things were changing, yes; but no-one had really grasped the magnitude of what was about to happen.
If you really want to know how much the media world has changed in the intervening years, imagine saying this back in 1996:
It’s hard to believe that Amazon was founded twenty-one years ago. Since their establishment in 1994, they have diversified into innumerable categories; but it is their impact on book publishing that is interesting to us. Amazon has disrupted the landscape that held solid for many years, and they haven’t done it gently.
Last year, Keith Gessan wrote in Vanity Fair that “all the publishers feel bullied by Amazon, and Amazon, in turn, feels misunderstood.” The implication that Amazon is the unwitting playground bully doesn’t, unfortunately, distract from the fact that they used their size and their far reaching power to the detriment of others by undercutting prices.
This strategy of Amazon’s, which basically cuts out the ‘middle man’ that is the traditional retailer, is having a hugely negative impact on the industry. Last year, while Amazon was busy falling out with Hachette, Steve Dent of Engadget UK wrote that “Amazon grinds suppliers to keep its competitive edge and publishers are no exception.” Amazon argues that it is looking out for the ‘little guy’ by saying that “we will never give up our fight for reasonable e-book prices”, but these protests seem hollow.
Negotiations on prices for e-books have largely failed, and have led to accusations that the company is using that figleaf to cover up its continuing efforts to under-price print books. Alexander Alter of the New York Times reported recently that the “paperback editions of some popular titles, like “The Goldfinch” by Donna Tartt, [were] several dollars cheaper than their digital counterparts.”
Of course, some of the responsibility for this has to be shared with the publishers themselves. Their collective unhappiness about online pricing is reminiscent of the Net Book Agreement dispute from the 1990’s, just as Amazon drew its first breath. And it is arguable that Amazon deserves a larger share of the e-book market because it is chiefly responsible for creating it in the first place with the invention of the Kindle.
As Amazon does not report their sales figures, it is difficult to gather a consensus on just how much e-books are thriving in monetary terms. We do know though, that the e-book market is prosperous and the traditional publisher only has around a third of the market share.
More worrying for publishers – and retailers – is Amazon’s share of the print market, and its pricing policy in that area. Amazon’s second-hand market, in particular, is troublesome; advertised on the same page as new editions, publishers do not get a penny from the sale of used books. One third of a monetisable e-book market is much better than three-quarters of a non-paying second-hand print market.
So perhaps patience with the playground bully is – after all – the best strategy. Despite difficulties arising from the Apple price-fixing case, publishers should focus on getting a better deal from Amazon on the electronic market, and seek to curb their prominence as a print reseller.
Picture the situation: your firm is an airline, a customer enraged by the delay in getting back to him about lost baggage pays to promote a tweet about the ‘horrendous’ customer service. It gets seen by 76,000 people, what do you do?
Well, if you’re British Airways, you take eight hours to reply, enrage him all the more with your excuse, and carve out your own little corner of Internet infamy.
Customer Services may once have been the preserve of call centres but now, thanks to social media, it has become a high-stakes game. Not only do firms have to deal with a new channel, they also have to deal with a new culture. Now, customer grievances and the responses they bring are aired in public. If your firm gets it wrong it could end up like BA – with a black mark that (despite all recent improvements to social customer service) remains shareable and searchable.
None of us needs a technology worthy or a digital consultant on £100 an hour to understand the importance of mobile devices. Cast a glance down any high street and you’ll soon get an idea for how inseparable we all are from our phones. Even Google tells us now that more searches are made via mobile or tablet device than via desktop.
Why then have so many businesses failed to create dedicated mobile sites or build specialist optimisation into their existing digital platforms? Do they think – unlike them – everyone else is happy to endlessly scroll, searching for a button or link that’s impossible to press?
Well, not so Domino’s Pizza. A couple of years ago the fast food chain took the decision to use mobile – on its own terms – as the venue to drive for competitive advantage.
Nick Dutch, head of digital at Domino’s UK, told the Smart Insight’s Digital Impact conference, in London earlier this week, how his firm had adopted a mobile-first strategy and sought to grow sales by focusing on this channel.
Tesco Labs, the supermarket’s digital innovation wing, is running a 48-hour ‘hackathon’ next month to spur the development of health-themed technologies for its customers.
The supermarket has made an open invitation to computer coders, designers, and those working in tech marketing and business development to attend the weekend event in London, starting on September 12.
The aim of the hackathon is to develop retail media ideas that can help Tesco’s customers make healthier food choices in store and online.
In addition, Tesco is keen to explore how it can share data to help customers understand their own behaviour, compare their food choices with others, share tips and advice, and track and find out more about what they’re buying and eating.
Running a small business in the digital age isn’t always easy. The inherent problems associated with battling a large rival offline have the unpleasant habit of transferring neatly to the online world.
Websites of firms with big marketing budgets are chocked with content; they command great authority from search engines; their inbound links are often of a high quality; and when search engines make big algorithmic changes, they respond quickly.
For small businesses that can’t compete on organic search, digital platforms offering flexible self-service ads and promotions can be a godsend.
Through its Adwords platform, Google allows creation of specific, targeted ‘pay per click’ (PPC) campaigns that can be tweaked easily through a self-service interface and provide smaller firms the exposure they need.
In fact, one small business owner told Tripp Associates his self-service Adwords had proved so easily manageable – and such a reliable source of revenue – he’d jettisoned his digital consultant and added £2 income to every £1 spent by closely managing campaigns himself.
And where Google has successfully enabled the small business owner, other digital platforms have followed.
What does Tesco do?
It’s just a supermarket, right?
According to Angela Maurer, it’s Head of Innovation, Tesco is also a technology company set on developing the future of retail – and that includes experimenting with grocery shopping via a Google Glass concept app.
Last month I tried to buy software online. I knew what I wanted, but when I visited the provider’s website it was full of baffling options and unnecessary guff. So I bought a rival product. My second choice. It was easier.
Then, last week, I bought a television. I researched online, found a product page with all the necessary info and a simple payment method, so I bought it. Suitable follow-up email has encouraged me to go back and buy a printer.
In both cases the determining factor wasn’t the product, it was the experience.
In recent weeks the concept of “efficacy” has become something we have been thinking about more and more. In conversations with clients and prospects, the ability for them to ensure a desired or intended result with the services and products they supply has been high on their list of concerns.
How do we – the conversations go – ensure we produce stuff our customers really want or need? How do we ensure a great reception for the things we produce or the programmes we run?
Increasingly, the answer is to establish a better understanding of the customer – and the way to do that is to talk to them more directly, more personally, and in an overall smarter way.
Remember the days when making a purchase meant having to drive to the shop and buying whichever version it stocked of the item you wanted? It almost seems like another age.
Now, with Amazon and others, we research, review, compare deals and shop for alternatives at the touch of a button. Control has swung to the consumer like never before, and in the next 12 months that trend is set to increase as brands invest in technology to enable even greater levels of personalisation.
Late last year, Marketing Week predicted the rise of ‘Me-tail’ would be the biggest marketing trend in 2014.
Put simply, the ‘Me-tail’ concept will see brands move from one-size-fits-all messaging to a position where they can feed specific campaigns and offers to consumers in the hope that they can build relationships that are increasingly relevant to the needs of individual customers.
In a short space of time almost all discussions on business communication have become discussions about content marketing – but unlike previous hot topics, this isn’t just a passing fad.
It is too easy to say that a lack of a coherent digital startegy is what killed HMV, Comet and Jessops. Too easy, but at least partly true. As this article by Philip Beeching on Guardian.co.uk shows, the senior management at HMV refused to understand the inevitable, even when it was presented to them in 2002. He claims that, at an advertising pitch he made:
The relevant chart went up and I said: “The three greatest threats to HMV are, online retailers, downloadable music and supermarkets discounting loss leader product.”
Suddenly I realised the MD had stopped the meeting and was visibly angry. “I have never heard such rubbish”, he said, “I accept that supermarkets are a thorn in our side but not for the serious music, games or film buyer and as for the other two, I don’t ever see them being a real threat, downloadable music is just a fad and people will always want the atmosphere and experience of a music store rather than online shopping.”
It is an over-simplification to say that businesses behave and grow like people: from selfish baby, to disruptive toddler, to self-conscious and defensive teenager, to the increasing comfort and complacency of the twenties, thirties and forties. Still, I’ll stick with it. And I’m intrigued, at the moment, by the transitions between stages. There have been many examples in recent months of businesses which have attempted to grow up. And some that just haven’t tried.
Children in their early years expect everything to be given to them, and – despite last year’s John Lewis advert – expect to give nothing in return. Matt wrote yesterday about Xavier Neil’s attempt to block Google advertising on his ISP, Free. His stunt was overturned by the French government; but what lay behind it was a serious question. The content – and advertising that goes with it – that Google and others provide requires ever greater bandwidth; but, like spoiled toddlers, they expect the ISPs and telcos to pay for the infrastructure without any share in the advertising revenues. It is not sustainable; the industry needs to mature, and find a compromise, this should help the development of further media recruitment.
Tomorrow, the DCMS will publish its recommendations on best practice for how (and if) public libraries should lend e-books. It’s not straightforward, as this item on C4’s news tonight demonstrates. There are four parties involved – users, publishers, authors and libraries themselves – each of which demand satisfaction.
Libraries have always challenged the publishing business model; but e-lending, with the implicit suggestion that the reader can borrow a book at any time from anywhere, throws the doors wide open. A drop in
It’s not every week you wake up to the noise of a well-run business shooting itself in the foot. But Waterstone’s decision to start selling Kindles in-store certainly looks like a case of “letting the fox into the chicken coop” as Today interviewer Simon Jack said this morning.
And there is no doubt that Amazon can be cast in the role of fox. If you don’t believe me, ask
The explosion of Pinterest is something we hear about on a daily basis. The fact that it’s biggest group user group is 18-34 year-old, upper-income women who are interested in subjects such as fashion and interior design is of great interest to fashion e-commerce players. The site appeals to the human desire to collect things and
At this week’s Retail Week Conference, Kingfisher chief executive Ian Cheshire told delegates that they need to improve innovation in order to remain competitive and that retailers will need to recruit people with a “real point of difference and who understand brands” because it is a different skill to those who trade the business.
As well as recruiting for technologists who can lead innovation recruiting into media executive jobs is vital. Retailers should carefully consider
As the number of empty shops on UK High Streets increases, retailers are resorting to more innovative ways to attract time-pushed shoppers, or those looking for more unique shopping experiences. The adoption of new technologies such as augmented reality and virtual changing rooms in-store is on the rise.
At this month’s Consumer Electronics Show in Las Vegas, technology company Bodymetrics showcased the latest version of their body mapping technology, which creates a 3D model of a shopper’s body that mirrors their every move, allowing them to virtually ‘try on’ outfits. The camera’s sensors can detect tightly or loosely fitting garments to help find the right size. Spanish company AITech.es have developed a similar technology that also has a system capable of determining the availability of certain items in real time and can promote related clothes according to the historical choices of the user.
At the moment, I think the true value of augmented reality technologies such as Bodymetrics lies in reducing return rates on clothing that doesn’t fit. If you run out of time to join the queue for the changing room to see if that much-coveted LBD that you absolutely need for tonight actually fits, simply try it on virtually and you could skip the queue. However, pair this with the ability to then tweet images of yourself wearing the dress to your friends to get their thoughts (Nadap’s Tweet Mirror for example) and the retailers could really be onto something…
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.
I’ve just been reminded of this year’s traditional family Christmas row. I mentioned that I was planning to buy a Kindle. My sister, an author of many books, spluttered that I shouldn’t mention Kindle to her. It would kill publishing – and media jobs – just as surely as downloading had killed the music industry. She also felt that authors were entitled to a larger slice of revenues from e-books because the publishing companies had much lower overheads.
Clothing company Zappar takes augmented reality clothing to a whole new level. This year, the company created interactive t-shirts that work with a free app – customers download the app and then view the t-shirts through their device screen. The t-shirt then ‘comes alive’ as the customer touches part of the t-shirt on the screen (see video). What’s really clever about the Zappar t-shirt is that it merges shopping and games in a move to generate interest and push sales. The t-shirts went on sale in the autumn in Macy’s and JCPenney stores in the U.S.
U.S. retailer Moosejaw created an X-Ray App last year that uses