Author Archives: Paul

Daily Reading 05/17/2008

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  • Web start-up unveils semantic Wikipedia search tool

    Powerset searches Wikipedia using conversational phrasing instead of keywords. It’s one of a new breed of search engines that tries to get at the underlying questions that Web searchers are trying to answer.

    tags: daily_reading, search_engines

  • EMarketer cuts social media ad spend forecast

    Social networks are still having trouble coming up with compelling ad models. EMarketer predicts ad spending on those networks will be just $2.6 billion by 2012, about five percent of the overall market. MySpace and Facebook collectively command 72% of social network ad spending.

    tags: daily_reading, research

  • Facebook backlash develops

    It was inevitable that Facebook growth would slow and critics would turn out to start talking about all that’s wrong with the social network. This CNet blog points to a developer’s observation that fewer people are developing Facebook apps than a year ago and extrapolates that Facebook may be in crisis. What’s really happening is that the market is becoming more mature and competitive.

    tags: daily_reading

  • Why Twitter Matters

    BusinessWeek’s Stephen Baker updates the Twitter phenomenon, explaining why microblogging is becoming an intrinsic part of people’s lives and how businesses are tapping in to the conversation.

    tags: daily_reading, twitter

  • Blogs Blossom into a Big Business

    “By 2012, more than 145 million people—67% of the US Internet population—will be reading blogs at least once a month. That is up from a readership of 94 million in 2007, or 50% of Internet users.” Ad spending is forecast to grow to about $750 million by 2012, which is nearly triple today’s total but still a small number overall.

    tags: daily_reading, research

IDG Reinvents Itself Online

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Last week, The New York Times wrote about International Data Group’s (IDG) successful transition from a print to an online model. I was intrgued to read about IDG Chairman Patrick McGovern’s enthusiasm for the economics of new media. Having gotten to know McGovern a bit during my 15-year career at IDG, I asked him to appear on the weekly MediaBlather podcast that I co-host with David Strom. He immediately agreed. That’s the kind of person McGovern is. With all of the weighty issues that he must deal with every day, he is never too busy to chat with a colleague, whether current or past. In fact, McGovern still visits every IDG operation in the U.S. each December to distribute bonuses individually to every employee.

Our interview was about the business issues of IDG’s transition from a print powerhouse to an online specialty publisher. McGovern’s perspective is be inspiring. While the print industry collectively moans about the pain of transitioning from print to online, IDG has quietly taken its medicine and reinvented itself. Today, the company derives less than half its revenue from print titles, and McGovern expects online business to make up 70% of sales by 2012.

At InfoWorld, which was spotlighted in the Times article, the closure of the print edition and shift to a wholly online model actually increased margins from a small net loss to a 37% net profit. “Not only is there survival after going online, but it’s a much better environment,” McGovern told us.

IDG’s strategy is now to launch all new titles online first, build an audience and then take the business to print if the market demands it. “That way, we already have the audience and we can show the advertisers who’s asking for [the print title] and who’s going to read it,” McGovern said. “It takes away the risk.”

What works in the U.S. doesn’t work the same way globally, of course. Scandinavia and Korea are among the regions of the world that are innovating most successfully in online publishing, McGovern told us. In contrast, India is still a healthy print market but with a budding cell phone culture that may make it the first major economy to jump from paper to mobile devices without an intermediate PC stage.

There are some other gems in this interview. One is about IDG’s flirtation with a public offering through its books division a decade ago. McGovern, who has always taken a dim view of the public markets, relates how the experience distracted the group from its traditional market into ancillary businesses where it had no expertise. “If they had stayed private, I think they’d be a larger and more successful company today,” he commented.

We also talked about IDG’s phenomenal success in China, where it publishes a host of consumer titles in addition to its big technology brands. IDG’s venture capital arm now makes more money for the company from investing in Chinese businesses than the rest of the company does from publishing.

If you want to hear an optimistic perspective on the future of media from someone who is leading the charge, listen to this podcast (right click and choose “Save As…” to download to your computer). I think you’ll find it to be 25 minutes well spent.

Daily Reading 05/09/2008

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Secrets of Blogger Relations

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From my weekly newsletter. Subscribe using the sign-up box to the right.

Since embracing social media two years ago, Dell Computer has learned a few lessons. One of its key blogger relations people shared some secrets last week in a keynote interview at the New Communications Forum in Santa Rosa, Calif.

Richard Binhammer is charged with monitoring and engaging with the active ecosystem of people who blog about Dell. In a keynote interview with John Cass, Binhammer talked about negativity, a concern often voiced by PR people. Dell has had its share of blogger criticism, going back to the famous Dell Hell incident of three years ago. But by methodically reaching out to complainers, the company reduced negativity from nearly half of all online posts to about 20% in a little less than a year. The secret? “Just talk to people,” Binhammer said. Most of the time, all they want is to be heard. Demonstrate that you’re listening and you can resolve most complaints.

But here’s an interesting fact: After reducing that negativity factor to 20%, the Dell team has been unable to bring it consistently below that level. Binhammer, whose background is in politics, theorizes that 20% is a natural floor, in the same way that 20% of the population always votes for the same political party, regardless of who runs.

This is worth remembering. Even the best businesses have a few unhappy customers. Your mileage may vary, but you should never expect to achieve 100% satisfaction. It’s more likely that your blogger relations program will get you to a manageable yet stubborn base level. That’s your floor, and you probably can’t do much to break through it.

Finding Resources
Binhammer also shed some light on how Dell allocates its communications resources. With so many tech bloggers out there, you’d think the company would have a small army of communications folks monitoring and responding to conversations. In fact, it has just two people sharing the job. The reason? Dell is lining up the whole company behind the effort to get more engaged with customers. PR monitors the airwaves, but doesn’t try to resolve every issue. Most comments are forwarded to the appropriate group for response.

I wish more companies would do this. Bloggers tend to be well-informed and passionate, which means that their inquiries and comments demand knowledgeable responses. Companies that simply delegate the response to PR are failing to benefit from the really rich conversations they can have with their most informed customers. Everyone from sales to engineering should want to speak to customers whenever possible. Why let marketing have all the fun?

Daily Reading 05/08/2008

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