Imagine a magazine with 100% influence on purchase decisions. If the magazine recommends buying a certain product, every single reader will buy it. In this case, the magazine could charge a huge amount for advertisements.

Of course, that’s not realistic, but illustrates an often overlooked point: influence improves conversion rates. And higher conversion rates mean you can charge more for your ads. Influence also improves the impact of brand-building ads, again meaning higher rates.

The influence a magazine has over its readers is very difficult to measure, which is probably why it’s overlooked. Determining how to increase influence is an urgent matter for editors and publishers who need to turn around declining ad revenues.

To give one example of how to build influence, UK-based graphic design magazine Grafik has introduced an awards ceremony. The intention is to position itself as a credible leader of good taste in design, and to become the place for reputable design brands to be seen.

Maybe 2010 will be the year when publishers really seek to increase their influence over readers: establishing and reinforcing expert credibility will be key.

I enjoyed this article in the Guardian proposing a service called Bookify. No doubt this is the sort of thing that Amazon (and possibly Google etc) are trying to create.

YouTube have recently modified the statistics they give on videos. The feature that caught my eye is called Hotspots. It’s an interesting concept, but I don’t think it’s fully thought out yet. Either that, or the help doesn’t explain it well enough.

The idea, according to YouTube, is to show “The ups and downs of viewership at each moment in your video, compared to videos of similar length. The higher the graph, the hotter your video: fewer viewers are leaving your video and they may also be rewinding to watch that point in the video again.”

So it’s comparing your video against all other videos for something like how many people are watching it compared to the same point in other videos. Nice idea, but it leads to some very weird graphs. I’ve included two examples of videos of mine. One has over 17,000 views, the other has over 22,000 views, so there should be enough data for a statistically valid sample.

How on earth do you interpret these graphs? Where’s the actionable insight? The second graph makes it look like more people are watching the end of my video than are watching the start, which is clearly nonsense!

I think it would be better if there was another graph that just showed the viewership for your own video at each point, without reference to other videos. The graph would nearly always be a line descending from a high point at the start, it would probably just be a question of how quickly the line drops off. But I think that would give people much more actionable knowledge.

That’s what analytics really comes down to: actionable insights. What can I do as a result of seeing this piece of data?

In this post I want to look at why advertising rates are so much lower online than in print, and show why affiliate revenues are part of the answer for online publishers.

Before many people had access to the internet, advertising media was relatively scarce. If you wanted to reach people in a certain niche, let’s say people who like Formula 1 motor racing, you only had a few options. There were magazines such as Autosport, Motorsport and F1 Racing, maybe five or six in total, and then the mainstream newspapers. Prices were high because advertising space was scarce. As an economist will tell you, it was simple supply and demand, and with this market the power was with the publishers – the supply. While the media wasn’t a monopoly, it wasn’t easy to start a new publication and this helped to keep prices high.

Then the internet came along. Today, if I want to follow Formula 1, not only are there the magazines and newspapers from before, but literally thousands of websites to choose from. And therein lies the problem – and also the opportunity! Now there are huge numbers of publications chasing the same ad spend. Things have flipped: the power is now with advertisers – the demand. That’s the fundamental shift.

What does this mean for the wider economy? If advertisers, such as retailers, can achieve the same marketing result with just a fraction of their former advertising budget, due to lower ad prices, they can either lower their prices, pocket the difference as profit, or move ad spending into new areas of marketing. In practice they do all three, but it’s these new areas of marketing that are the big opportunity for publishers.

Rather than spending on ads, a retailer can operate an affiliate scheme. Here, someone gets paid by the retailer when that person’s recommendation leads to a sale. Most people believe that word of mouth marketing is not only the oldest but also the most effective method of selling, and I agree. You are much more likely to buy a new type of phone if your best friend tells you it’s the one to get, rather than a man in the shop or an advert in a magazine.

Having run affiliate schemes myself in the past, I know that the one big advantage is that you only pay for the sales you actually make, rather than with ads where you pay up front for sales you might make. It helps cashflow immensely, because you’re paying out of existing takings, rather than giving cash up front before the revenue rolls in (and with lots of advertising the revenue doesn’t roll in anyway). Also, as a retailer I’m happy to pay a relatively large commission on an affiliate deal, because I know 100% that a profitable sale has already been made, and I can very accurately track the efficiency of each penny of marketing spend.

The challenge for the affiliate is to build a strong enough reputation with the customer that the affiliate’s recommendation to buy a product will be acted upon some of the time. It’s really about becoming a friend to the customer, so that word of mouth takes effect.

It should be clear by now that affiliate deals are a massive opportunity for publishers if they can build a strong enough reputation and bond with the customer that the affiliate recommendations are acted upon. This requires a genuine and honest commitment on behalf of the publisher to help their customers, not a mercenary attitude where money rules at all costs. In future posts I’ll look at how this relationship can be built and strengthened.

I liked this ad from agency Rapier UK, which appeared in Marketing magazine (25th Nov 2009). It’s quite a long amount of copy to read, but it’s well-written and makes a clever point. The start of the piece is especially good at drawing in the reader.

The PDF version of the Rapier UK ad is here.

This video claims that there are now over 1 trillion webpages in existance. That’s 1,000,000,000,000 pages, and growing every day.

I think we’re reaching the point of information overload. I follow a few websites, maybe 5 or 10 in detail. I follow about 150 people on Twitter, but that’s all I can cope with. (For why that is, read up on the Dunbar Number) I add RSS feeds to my Net News Wire, but I never get round to reading them. There’s just too much information. Or, to be more exact, there is too much data.

Let’s consider a few of the issues that this raises, and then figure out what the bottom line is.

Signal vs noise – what’s actually important?
Of all the pages you read in a day, and all the links you follow, how much is actually useful to you? 25% if you’re lucky, I’d say. This means that if you could figure out what’s actually worth reading, you could save 75% of your time, or follow four times as many sources, just more selectively.

Short attention span
Because there’s so much stuff to plough through, to make sure you don’t think you’re missing out, you can’t really give anything your full consideration. You skim, and don’t have time to think about the implications of what you’re reading.

Fads – flavour of the month is now flavour of the hour
Think of the viral videos, quirky links etc that are so beloved of marketers. You look at them, and then you see a new link to the next great thing on Twitter, and you’re off again. Fads are so short-lived now – micro-fads you might say – that to monetise anything like this you’re going to have to do it quickly!

Poor quality traffic
When you visit a viral link on a page, do you hang around on that site? Mostly not. Do you even register what that site even is? Mostly not. Could you tell someone else two minutes later which site you went to? I doubt it. So the viral link that gets all the attention for an hour or a day has a very hard job of doing anything other than racking up a bandwidth bill.

How much information can people consume?
It would be interesting to know how much information a human being can actually store and process in a meaningful sense. From an evolutionary perspective, are we able to cope with the world that we are creating?

Who really cares?
You read all this stuff on the web, follow all these links, desperate not to miss out, but do you really care? I mean, really care? If you missed a couple of days, or a week, would your world stop? If everyone’s obsessed with the notion that Rupert Murdoch’s paywall will fail, is that an argument that people don’t actually care all that much about what they read?

BOTTOM LINES: Attention and engagement
Marketers such as Seth Godin, who I greatly admire, have been claiming for years that attention is now a very scarce commodity. It’s true, but people don’t believe it. My examples above show that we don’t really have an attention span any more. We have so much to pay attention to that we pay attention to nothing.

As media owners, writers and publishers, this is bad news. If people don’t pay attention, they won’t become engaged in your content. And it’s engagement that keeps people coming back for more. Engagement keeps people on your site, not a competitor’s. Engagement makes people trust you, follow your recommendations (which may be via your ecommerce site or affiliate link), and notice your ads.

In online media it’s not the person with the most content that wins, it’s the person who can most effectively hold the attention of readers and engage them in the brand.

I intend to write more on the strategies that publishers can use to gain attention and increase engagement. Can we measure these things, and can we move them in the right direction for our brand?

This article on the Huffington Post does a good job of summarising the case against charging for online subscriptions.

What makes this an interesting debate is seemingly something that none of the main combatants can see: the “free vs subscriptions” debate is not either/or, winner takes all. It’s horses for courses (or some less cliched variant thereof). For some sites, such as many of the high-end financial sites, a paywall works just fine. For other sites, where similar content is available elsewhere, a paywall won’t work.

You might even say it’s a matter of commercial judgement.

For people to accuse the other side of “not getting it”, or being thieves, is to miss the point. But why let facts get in the way of a good argument?

Outside Regents Park tube

If your publication is free, it’s vital that it reaches the widest possible appropriate audience. You don’t make as much money on each copy, because there’s no cover price revenue, so you have to distribute more copies. Low margin, high volume.

That’s why it’s such a shame that the London Evening Standard seems to have got it wrong so far. Where we work, on Oxford Street, it’s pretty much impossible to get a copy of the paper. You might be able to get one at Oxford Circus tube station if you’re lucky enough to arrive in what seems like the 20 minute window where the paper is there. If you’re up at the Tottenham Court Road end, forget it.

Can you get it in shops? Not really. Are there street vendors like there used to be? Not really.

The London Evening Standard has achieved an amazing feat: at a single stroke destroying both their subscription revenue base and  their distribution channel by going free. Peter Preston mentions in the Guardian that the Standard manages to distribute 600,000 copies a day! How? Where? To whom?

Still, I’m sure they know what they’re doing.

I got a Flip Ultra HD camcorder today – £119 from Amazon . It’s a High Definition camcorder that’s incredibly easy to use, and plugs straight into your Mac (or PC). It’s the same camera that Gary Vaynerchuk uses for his highly effective daily wine review video at Wine Library TV.

Flip Ultra HD

Buying the Flip has really brought it home to me just how easy it is these days to make high-quality recordings and share them with the world.

It’s also reminded me that there’s a difference between a high quality picture, and a high quality finished production! I think that’s where the professionals will still have an edge. There’s no doubt that presenting a video is a skill, and so is setting up the shots and doing the editing. That’s where I think newspaper video content has often fallen down: it’s not enough to just give a print journalist a camera and tell them to make a video.

Another skill is figuring out which content is well-suited to video, and which is not. You can skim the text of an article, but you can’t skim a video. A video requires a real commitment of time on the part of the user; I personally rarely watch online videos for just this reason. I think online publishers who carry video content would do well to also provide a written transcript to help people decide whether to watch the video, and to get the basic points if they haven’t got time to watch the whole thing.

So what’s the future of online video content for professional publishers? Hardware and software to make videos is now fairly simple, and will get simpler, so everyone can potentially join in. However, good quality video production is pretty time-intensive. You can write text articles far quicker than you can do high quality video. So maybe video will remain a niche on professional sites: a treat.

Here’s an interesting article on PR Week, where the editor discusses the balance between the print magazine and the website.

Essentially, they’re shortening the news section in the print magazine, turning it into more of a round-up, and putting more news on the website. The print magazine has had the opinion/editorial section increased.

I think this is a move in the right direction: choosing the destination of print vs online for where the content works best.