The Daily Peg: Pegasus News, Inc. Founder's Blog

The linchpin of our plan

I've been waiting for the chattering class to start talking about things related to the really revolutionary part of our business plan, the part that puts most of the content-creators to sleep.

Jarvis, et al. are calling it "Consumer-driven advertising" (emphasis mine):

What we really want -- the endgame -- is consumer-driven advertising.

Says John [Battelle]:

Ideally, commercial media would consist of equal partnerships between three parties: publishers, the audience, and advertisers. In reality, advertisers, the group with the most money, hold all the cards. Publishers have been relegated to the role of supplicant, and the audience—well, we pretty much have to swallow whatever deal the publisher and the advertisers cut.

For the most part, the Internet has inherited this model from print publishing: on the Web, there are far more publishers trolling for ad dollars than there are advertisers doling them out. But the Internet’s interactivity suggests an alternative economy in which the long-standing imbalance between publisher, audience, and advertiser could be corrected. A system of Internet-based marketing, which I’ll call Publisher-Driven Advertising, or PDA, may be soon possible. In this system, publishers would pick and choose from a vast supply of advertisers.

The idea, to recount it as simply as possible, is that rather that advertisers would make ads available; publishers would pick up the best ones for their audiences and interests; advertisers would pay only for performance.

In the previous discussion, I tried to take this another step by suggesting that publishers (bloggers, that is) and consumers should create advertising [link mine]. Yes, there'd be screeching that the creative wouldn't match the advertisers' brand messages -- but when you think about it, that's damned silly: Who better to create the brand message the works than someone who has bought your product?

Now I will take this one step further, arguing for consumer-driven advertising and ad transparency: In this new medium with all its targeting power, how much better it would be if we could tell the targeters: Don't give me car ads because I'm not in the market for a car now, thank you. Don't give me feminine products because I'm a man. Don't give me booze ads because I'm on the wagon. We'd be telling them not to waste their money paying for our eyeballs. That's better for the advertiser: far more efficient. It's better for the publisher: far more efficient. It's better for consumers: far less irritating. It makes advertising actually useful. What a revolutionary concept!

See Jarvis' First Law of Media: Give the people control of media, they will use it. The corollary: Don't give the people control of media, and you will lose. (More broadly expressed: Bet on that which gives citizens control. And bet against those who try to maintain control apart from the public.)

See also Oren's corollary: Every ad a wanted ad.

Ahem, yeah. That's pretty much the business plan, chapter and verse. (Been there on the right rail since day one.) That's what we're going to do. Every bit of that.

And we can do it in print too.

AND the technology is so simplistic and cheap, it's scary. It's already out there. All we're doing is weaving a few things together.

As Jarvis points out, it doesn't work for everything -- that's why there are still some "wide-market" ads in the model. (BTW, Jeff: This is what I was, albeit badly, explaining to you when we spoke. We still have some work to do on the manpower of taking it down the long tail. )

But, the pay-for-performance model means that a lot of folks who would never talk to an upstart paper will talk to us. And unless I'm missing my bet, this model doesn't work (in transition) for an incumbent with a lot of entrenched revenue on the old model at risk.

It should also be noted that it would be very hard for an individual blog, or even a small network of blogs to gather enough user data to make such a model sing. Not so for an aggregator and large-scale content provider.

And don't forget that most purchases are made locally. That's why hyper-local news is so important.

The execution of this ideal is our innovation. This is how we think we can change the world.

Merry Christmas. We'll see you next year...

Does a Red Ryder BB-Gunrequire bullets?

• Ruminations on Truth in advertising
• Why the US is stone-age in terms of mobile content usage
• Steve Outing: What bloggers can learn from journalists
• Tim Porter: Indistinct = extinct . Simon Waldman, in a continuing discussion of RSS, agrees. So does Forbes.
• A rare case where I disagree with Tim: The battle must be fought - and won - in the minds of the journalists before it can be taken to the pocketbooks of the publishers. It's been my experience that unless change clearly positively impacts the bottom line, it doesn't happen. I repeat my suggestion that both camps need to attack this together.
• John Battelle, whose batting average on industry predictions is pretty impressive, has a new list for 2005.  We'd love to fulfill # 3.
• More predictions: Jack Meyers says online advertising to jump 30% this year.

Are they really that afraid?

The Dallas Morning News has a front-page (front page? Front Page? Front-frickin'-page!) story about a media industry in trouble. A medium that is suffering from flagging readership and declining ad revenues. A group casting about for answers in the wake of waning interest in their product.

Who, you may ask, is facing such desperate times?

Bloggers.

I can't wait until they run the story about what a joke we are. That's when we'll know we've arrived.

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UPDATE: The Media Drop further fisks the article: This is the kind of article that peeves me so much and keeps me following the media as a whole. If you weren't familiar with blogging at all, you could look at this and say "See Martha, I knew there wasn't any money on those blogs - they're just another fad. Tell Tommy to stop wasting time on his LiveJournal already."

The best blog of 2005?

Lileks comments on blogging and media. Several folks on our team have remarked on the similarity between our business plan and this part:

In a sense, blogging is so 2004. The next big thing will be videoblogs. You can fit a rudimentary TV studio in a suitcase -- a laptop, a camcorder, a few cables, and a nearby Starbucks with Wi-Fi you can leech onto to upload your reports. This too will be good. One hundred thousand pairs of eyes looking high and low, versus CBS' staring monocular orb. We'll all turn to the nets to see what they think we should think. And then we'll hit the blogs for the rest of the story.

Totally gratuitous, but this makes me want to again drop in my all-time favorite Lileks bit (emph mine):

Blogs haven’t toppled old media. The foundations of Old Media were rotten already. The new media came along at the right time. Put it this way: you’ve see films of old buildings detonated by precision demolitionists. First you see the puffs of smoke – then the building just hangs there for a second, even though every column that held it up has been severed. We’ve been living in that second for years, waiting for the next frame. Well, here it is. Roll tape. Down she goes. And when the dust settles we will be right back where we were 100 years ago, with dozens of fiercely competitive media outlets throwing elbows to earn your pennies.

In retrospect, TV looks like a big smothering quilt: it killed the afternoon papers, forced the survivors to consolidate; it reshaped the news cycle to fit its needs, shifted the emphasis to the visual. It fed off the Times and the Post and other surviving papers, which had institutionalized the Watergate and Vietnam templates as the means by which we understand events. The old-line media, like its Boomer components, got old, and like the Boomers, it preferred self-congratulation to self-reflection. And so the Internet had it for lunch, because the Internet does not have to schedule 17 meetings to develop a strategy for impactfully maximizing brand leverage in emerging markets; the Internet does not have to worry about how a decision will affect one’s management trajectory; the Internet smells blood and leaps, and that has turned the game around, for better or worse. So we’re back to where we were in 1904 – except that the guys on the corner shouting WUXTRY, WUXTRY aren’t grimy urchins selling the paper – they’re the people who wrote the damn thing, too.

Stylebook, cont.

Thusfar our stylebook posts have tended to the whimsical. But, a discussion at our team meeting on Monday and a pair of opinion pieces in this morning's DMN has me thinking about some more serious issues.

1. If race/ethinicity/ethnic origin is part of the story, it goes in the story. If the cops haven't found the bad guy yet, and his ethnicity is a useful identifier, it goes in -- white, black, brown or green. If the perp is an illegal immigrant, that's part of the story. (To be fair, after -- but not necessarily because-- broadcast outlets in town widely reported this angle and took the News to task for omitting, it was finally included in the sentencing story.)
   
   
2. While we will welcome all editorial viewpoints, we are under no obligation to automatically publish opposing viewpoints side-by-side and on the same day.
   I understand that there was considerable wrangling before either of these views on the Khomeini tribute event held eleven days ago made it into print -- although the discussion has been ongoing on the News' inexplicably permalink-less blog. When every story involves conversation, you don't have to negate your stance with an obligatory (and in this case logically fallacious) counterpoint. You can, on a bad day, but it's not de rigueur.

Discuss.

All I want for Christmasis my two RSS feeds

James Lileks . Jim Romenesko.

You can make my yuletide dreams come true.

Required year-end reading

Mark Glaser has a review of the year in media and a look at the near future, aggregating interviews from the Pantheon. Bonus-- includes another nice mention of us. Daily Peg's must-read of the week

Bullet the blog sky

• Steve Outing, and in response, Tim Porter on what journalists can learn from blogs. Reminds me a lot of the mad early-August scribblings of an idealistic young Pegasus.
• Tom Hespos: 2005 - The Year of Hyperfragmentation
• A California court says that there's no regulatory difference between a website and a newspaper. I know of one little-discussed, but very lucrative, line of print advertising that could be in serious play if that becomes a precedent.
• All eyes on my hometown:
  
  • More from PressThink
  • Interesting thoughts from Joe Gandelman.
  • Yeah, so John Robinson is one of my heroes now. But where's Robin Saul? I'm not picking on him per se, but I'm still wondering where are the publishers, circ managers and ad reps in this conversation? Without them, the discussion is intellectually interesting, but not nearly as impactful as it could/should be.
  • Ed Cone sees bloggers worrying about the money, though: There is an urge among some Greensboro bloggers to kill a goose that has yet to lay a single golden egg. People who write for free are worried about losing money they don't make to a company that doesn't have a clear plan for capitalizing on their work. (Hmm. Reminds me of an unrelated situation with a friend of mine.)
• Simon Waldman touches on the unforeseen changes in distribution that lie on the horizon thanks to RSS. Very in line with our plan-- our feeds will lead you to our stuff and other outlets, both MSM and blog.
• More Joe Gandelman, with a newspaperman's view on the WaPo purchase of Slate.
• Russell Buckley describes Flikr's rabid fan base. That's the kind of relationship we dream of having with our co-conversants.
• How aggregators are filling a role that Google can't.

And when the quick have run away like pellets,Jack Satan smelts the dead to make new bullets

I'm starting to agree with Ed Cone -- Headlines for blogs are rough stuff. That was the most convoluted lead-in to a bullet point list yet. Bonus points if you can name the source without Googling.

• Reorg at Belo Interactive. Sites are going back to the individual properties. Sounds like a white flag to me.
• Vin Crosbie has a message for the leaders of the major newspaper chains. He sounds a wee bit miffed. Interesting point: Don't blame the crash on the Internet-- the circ decline started in 85; readership with the advent of television.
• Jay Rosen continues the discussion of today's and tomrorrow's press. My hometown continues to be at the forefront. I continue to wait for the businessfolk to join the conversation.
• The folks at Blogads are practicing open-source ad planning.
• Tim Porter's overview of a tough year for journalism: In order to survive, newspapers must change their form - form, not standard - of journalism (not to mention their means of advertising delivery), but, as radical as those new forms may seem in most newsrooms, I no longer think that is enough. Many news executives know what to do, but they still don't do it. They are handcuffed by cultures that not only inhibit change, but frequently punish those who champion it. What's needed is a fundamental organizational makeover. The current newsroom structure - segregated departments, hierarchical decision-making processes, platform specific (instead of agnostic) content, and strict producer-consumer division - does not permit change on a large enough scale to break newspapers free from the traditions that bind them.
  
  Everyone I talk to in the industry says that change will never come from within. That's why we're here.

Too hyper?Too local?

The Sunday Zits cartoon put me in mind of a couple things I've read lately indicating a key piece of fallout in our Brave New World: What used to be "not-news" now is, and the lines of privacy are a shiftin':

• Ed Cone has an example of the "everyone's a reporter" mentality
• NYT Magazine: Unconstrained by journalistic conventions, bloggers are blurring the lines between public events and ordinary social interactions and changing the way we date, work, teach and live. And as blogs continue to proliferate, citizens will have to develop new understandings about what parts of our lives are on and off the record.