The growing power of info-mediaries is an important factor affecting channel strategies in many industries: travel (e.g., Expedia, TripAdvisor), consumer electronics (CNET), automobiles (CarPoint), Medicine (WebMD).
This is an especially big deal for publishers, where "aggregators" like Google, Yahoo, and MSN collectively receive 75% of the approximately $16 billion in global advertising spending on the fast-growing Internet channel.
Recent conversations have us thinking about these issues:
What’s in play? How much of online publishers’ existing revenue is at risk from aggregators? How much new revenue is out there for publishers and aggregators to compete for? To seek together somehow? (Current forecasts call for Internet advertising to expand 15-20% a year in a $400 billion global advertising market that is growing at approximately 5% a year. That puts another $2-3 billion a year in play, or another business roughly the size of MSN.)
How do these potential market opportunities change as new technologies appear? For example:
- How much share do podcasts steal from radio (currently ~15% of total global ad spending)?
- How much share do RSS feeds steal from print (currently ~30% of global ad spending)?
- How much share do vblogs and streaming video steal from TV (currently ~40% of global ad spending)?
- How much share does micro-targeted TV take back from all other categories, including Internet?
- Even more interestingly, how do traditional advertising channel boundary definitions break down with the advent of new technologies? What is a giant LCD billboard: outdoor or Internet? What is an ad seen on a laptop via Slingbox: TV or Internet?
Much of the appeal of aggregators stems from the explosion of new content sources, e.g., blogs, and serving the associated desire to find them. But there are examples of value-added creation-oriented intermediation in the Internet’s “marketplace of ideas”, such as Ohmynews in Korea. What opportunities do such examples suggest for publishers here?
What opportunities do the evolution of standards such as RSS present for re-taking control of content – or further losing revenue to aggregators? For example, Google recently filed for a patent on an approach for including ads in RSS feeds. How big a threat is this? Or, is there an opportunity for an publisher-led consortium to popularize/commercialize an RSS extension like the Event Share Framework extension to the RSS standard?
For all its power, search, the killer app driving the rise of the aggregators, is still in its infancy. Should publishers form a research consortium to develop or license a next-generation search technology (for example, latent semantic indexing) which individual members could then extend in ways appropriate to their needs?
Meanwhile, how to play the game more tactically? What’s working? Under what circumstances? What isn’t, so others can avoid the same mistake?
Stay tuned. Meanwhile, in the middle of all this noodling, I listened to this podcast of a talk by Rob Curley, who runs the online operations of the Lawrence (Kansas) Journal-World. The creativity that stems from a hyper-local focus on their "customers" and their passion for the issues that concern them is stunning, entertaining, very energizing, and ultimately applicable well beyond publishing's borders.
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