Gravity Medium

I just met with a true innovator in public media this week, someone that’s a bit of a hero, really, and in this brief conversation I was surprised to hear a comment about the web that was, well… stunning. (And I’m not going to divulge the identity of this person because it’s irrelevant to the story.)

When asked by a colleague of mine whether this public media company was currently selling online advertising via their web presence, the answer was not only “no,” but “no, and we don’t plan to.” This person went on to say that the cost of putting together and managing an online advertising system would outweigh the advertising revenue that could be gained. Their take is that careful cost analysis must be done before they do any new projects and right now the web doesn’t look like a good cost bet.

Fair enough. That’s actually the tack I’ve taken at our shop in Anchorage. Why bother with the rules, the systems, the web redesigns required when the payback would be so small on sites with comparatively low traffic numbers?  I’ve avoided it to date.

But the comments didn’t stop there. This person further said they were going to wait until they had created a “scarcity” in the market for web advertising (on their properties) and then set prices for online ads when companies are “begging” to get their ads on the target site(s).

You’re going to create scarcity? On the web? Really?

I almost started to counter this idea right there, but out of respect left it alone.

Later I checked my RSS feed subscriptions and discovered a blog post from Google talking about how many pages there are in their index of the online world. Their numbers:

• 1998 — 26,000,000 pages (26 million)
• 2000 — 1,000,000,000 pages (1 billion)
• 2008 — 1,000,000,000,000 pages (1 trillion)

And presently the index grows by several billion pages each day.

But you’re going to create scarcity. Mmm-hmmm.

Okay, snarkiness aside… you can create scarcities online, I know. And public media entities are in a fairly good position to do that if they can gather their comparatively rarified audiences in the online space in large numbers and on a regular basis.

But there are two problems with this notion:

1. You’re not the only property online with desirable demographics for advertisers, because your web audience also visits lots of other sites and other sites can offer more targeted demographics.
2. Public media sites, especially for local stations, are… well… pretty bad as core web destinations. You’ll never be able to profitably sell such small and fairly broad audiences to advertisers in a market where #1 is true.

For the most part our public media (station) web sites are sorry shadows of our on-air presentations (there are, of course, a few exceptions where real investments have been made, mostly in the largest markets). Why?

• Our web services are typically afterthoughts.
• We do them because we “have to.”
• They are not must-see daily destinations.
• They are not valuable social networks.
• They have a fraction of the news presented by any local newspaper site.
• They are often unattractive and hard to navigate or bland, boring and so on.

The site visitor counts are understandably low.

And I level that charge against my own sites as well as the sites of other public media companies. They’re just not worth visiting regularly unless there’s something you heard/saw on air that you needed to hear/see again or you want to make a pledge online.

Further, if you did sell online advertising, how would you do it? You’d use your existing development / sales staff, wouldn’t you?  Commissions, salaries, healthcare costs, etc. all loaded up on top of the sales.  And then there’s the overhead costs of the rest of the organization as well.  No wonder web advertising isn’t worth it — it works on a different scale.

And thus we return to the same point made recently about the Bryant Park Project failure at NPR: you cannot expect broadcast economics success from a web economics property. Web properties work on a different scale than radio or TV. It’s a smaller, lighter scale. It supports fewer overhead costs and requires less staff.

Two solutions:

1. Create a web property that works on a web scale and draws its own audience and community. Make something that is a must-see daily destination, or create a site that solves people’s problems or provides a core service they need every day.
2. Create your web property in an economic “bubble” outside the normal expectations of staffing and profitability of broadcasting — at least to start. If you want your web property to help pay your transmitter bills, you’re dreaming now and probably forever.

So I agree — don’t bother selling advertising on bland sites with low traffic. I wouldn’t try to “monetize” most station sites today.

Instead, discover how network economics can work for you and build something compelling outside the expectations of the legacy properties. This might even be — or probably should be — a spin-off property, a la Mark Fuerst’s recommendation, captured on video here:

Recently, Robert Paterson pointed out a Diane Mermigas piece talking about shifts in the advertising market, especially in relationship to network TV sales. According to the Mermigas analysis, network TV stands to lose up to $1.5 billion during this season of “up fronts” alone. That’s a lot of dough for any industry to lose nearly overnight, even if it is spread across several mega-media corporations.

I commented on Paterson’s site, but realized I liked my response so much I wanted to elevate it to my own blog in the process. Here’s Paterson’s question and my own response:

Is this the problem stated in Money terms?
Here is Diane Mermigas talking about the commercial networks — is this the same for NPR and PBS?

I would say Public Media are not impacted as directly by advertising losses like this, nor do the losses/impacts happen in phase with commercial media.

But the losses are there or soon will be (depending on the size and sophistication of your advertising clients).

But what’s worse — much worse — is that revenue from advertising (sponsorship!) is not managed as professionally in public media as it is in commercial media. This means that trends in ad spending are not understood as well in public media as they are elsewhere. So as changes ripple through the ad space, public media won’t figure it out for several cycles. Blunted reaction times will lead to lost opportunity and lost money.

Commercial outlets have a firm, financial bottom line and they calculate where that line lies every day, every week, every month, every quarter. Public media is not so fastidious. Our bottom line is the soft concept of “public service” (imagined in many different ways) and revenue is only a means to that end. We don’t have hard measures of public service, we don’t analyze so deeply or accurately, as a group (I’m sure there are some exceptions, of course).

Indeed, as nonprofits, we tend to downplay “overhead” costs like sales analysts or “management” functions that could lead us to higher revenues and better customer relationships in the underwriting space. We don’t really operate like a business where it matters most — where money intersects with mission.

On top of all that, then there’s the problem of TV. All TV outlets have fewer and fewer viewers as the mass media model breaks down in a flurry of new outlets and platforms. And then there’s the demographics of PBS generally, which are less-than-desirable for many marketers.

In short, the money is moving where it can get greater impact, and public media outlets are pooly prepared to sense the change or alter course to meet the advertisers at their new destinations.

The solution? Get engaged locally in a way that’s unassailable by national trends. Build deep relationships that, yes, can be “monetized” in both corporate and individual realms. Develop relationships with sponsors that have historically not played in local media. Plus, get your butt online in a real way, not with business card web sites. Oh, and be sure to have some hard-nosed analysts on board that keep the business honest on the numbers — avoid the doe-eyed optimism that sometimes overtakes “soft” nonprofits like ours.