Thursday, April 12, 2007

Beyond the Buzz

Currently, Web 2.0 is the big buzz when it comes to Internet marketing. Simply put, it’s empowering users to select the media they want, influencing how consumers affect advertising, and allowing consumers to generate the next news event or popular culture phenomenon. It is a change that is exerting tremendous influence – and creating endless opportunities – the world over. The following is a look at how various media are employing Web 2.0, and some key issues that are being brought to light by their efforts.

One example of how the print world is reflecting the influence of Web 2.0 is a current promotion by Xerox and Wired Magazine. It’s called “Make Wired Your Own”. The drive of the promotion is to get current subscribers, 5,000 total, to upload their image so it can appear on their very own copy of the magazine cover. This is a perfect example of print and online converging. This is not only exciting for a current subscriber of Wired, but almost an envy to others that can’t participate. It’s creating yet another way to get a consumer excited about their brand.

If you’re a brand like Splenda - your image is everything. Brands worry about image so much that it practically consumes them. In order to control bad PR, Tate & Lyle, manufacturer of Splenda, along with its US based co-developer Johnson & Johnson, bought up potentially negative domain names by the hundreds (such as and Why? They fear the online consumer. But chances are if someone has something bad to say about a brand, they will find a place online no matter how hard that brand may try to stop them. This is the power of Web 2.0 for better or worse. Consumers can almost make or break a brand merely on how they react to it.

MTV, on the other hand, has developed a counter-strategy which embraces the new Web 2.0 strategy. Their approach: if you can’t beat them, join them. Kenneth Li from Reuters writes that, “MTV Networks, owner of the MTV and Comedy Central channels, is pushing a risky new Web strategy to win back young viewers from the likes of YouTube and MySpace. The network, which already has 150 Web sites in 162 countries, plans to build literally thousands more, hoping to draw viewers by letting them watch, contribute and even re-edit its television shows.” This is an established brand name almost re-branding themselves in order to keep pace with the Web 2.0 world. As the article further states, “MTV Networks” new strategy is part of an effort by Viacom to reach a wider audience that is spending as much time on the Internet and on video games as watching television, and no longer cares when or where programming is shown.” A Pricewaterhouse spokesperson points out the Internet video download business is expected to be worth $3.7 billion in annual revenue in 2010. Why wouldn’t MTV embrace this strategy?

The next big challenge a recent Reuters article points out is: “(finding) new ways to court viewers who split their time between viewing traditional media, surfing the Internet and playing video games. One such solution vying for consumers’ attention will be Joost. Joost’s primary focus is on network-quality programs – an entire network of global programming without the problems we have with today’s streaming video. Compared to Apple’s iTunes, which sells TV shows and movies, Joost is free, though its content is peppered with one to three minutes of ads an hour. It’s bringing the traditional broadcast model full-circle. A recent article explains: “Joost is lean-back from a content point of view, but its attractiveness to advertisers is in getting you involved”. Ad execs love Internet TV because its audience is measurable, targetable and interactive. “If you spend 10 minutes learning about a new car you’re interested in,” Ozguc says, “that’s worth gold to advertisers.” By 2010, Parks Associates estimates, the online-video market will grow fivefold, to more than $7 billion. So far Wrigley, T-Mobile and Maybelline have signed on, and others may customize ads not just by location, but also by viewing style. Watching Lassie, Benji and other dog flicks? Purina might have a message for you. “There’s no reason why a real estate company couldn’t put an ad up linking to a video walk-through of properties in your neighborhood,” says David Clark, Joost’s advertising director. Jeremy Allaire, the CEO of Web video provider Brightcove adds: “Unlike traditional entertainment media, however, end-user participation should be a big part of any online media strategy.”

In the midst of all this lies the question: Who owns content? With users seamlessly able to upload anything to the web they feel catches their eye, then how much control do you truly have over your own product? To quote Mark Cuban, regarding usage rights for content on the web: “HBO charges a monthly fee to subscribers. If someone can watch an HBO show on Google Video or YouTube, even if it’s divided into 1, 3 or 6 partsand reassembled into a playlist, they have far less incentive to subscribe or retain their subscription(s). HBO in turn, syndicates those shows to cable networks. As an example, A&E paid a reported $2.2 million per episode of the Sopranos. If the content is available online, do you think maybe it might reduce the value to A&E and HBO of the Sopranos? And that’s before we even get to overseas syndication. YouTube and Google Video have a great deal of popularity overseas because in many cases US shows are not as readily available. Online international viewing reduces the international revenue opportunity. Then of course there are DVD sales. YouTube downloads every video right to your PC. Google Video not only downloads to your PC, it provides the option to convert it into a PDA format including the iPod. So tell me why it makes good business sense for HBO to let users post the content they sell for a ton of money?”

Essentially, the Internet is the new antenna. Where content is free, and integration of products is crucial to connecting with the consumer. How brands engage the consumer is still key, both from a delivery standpoint to a product standpoint. With the web terrain already cluttered with sites that want to deliver us entertainment, it is even more important that those delivering the content become “household names.” Established brands like Yahoo and Google would be wise to create their own concepts of Joost. Why? Because they’re established brands and already have a built-in consumer base. They are not starting from scratch. We already see brands that are stepping into this entertainment sphere. Apple TV is a perfect example of an established brand that has already had success in delivering music, trying its best to take another piece of the pie by creating a delivery system that is practical and engaging. Its sole purpose is to take all the entertainment you have already downloaded from Apple, and enjoy it on a TV anywhere in your home. Apple is not the first to come up with a delivery system like this, but they are perceived as a brand that delivers technology that is easy and simple to use. An established brand that already has a loyal consumer base will inevitably increase with this incredibly approachable technology.

So what does Web 3.0 look like? Well, the web doesn’t consist solely of websites anymore. Take Sony and Xbox’s online gaming platforms and Second Life, an online “metaverse.” These are massive global networks made up of communities of online users. Brands integrating into these environments are one of the fastest growing trends. Second Life will soon integrate voice as well as web-content. What will happen once it can support content such as Joost’s online broadcast model? Total convergence seems inevitable. Imagine logging on at night and sitting in your virtual home, watching the playoffs on a virtual Samsung TV with your brother from Detroit sitting next to you on your virtual couch. The trash talk is brutal since you’re rooting for opposing teams. One of you’re virtual neighbors from the UK wanders in to sit and watch the game with you. The scary truth is that we aren’t far off from this now. By the time you read this, it may have already happened.

Ann Marie Mathis
Creative Director, Interactive
Cheil Communications

No comments:

Post a Comment