Oct

27

Mea Culpa, Mea Culpa

Filed Under B2B, Big Data, Blog, data analytics, Industry Analysis, internet, online advertising, Uncategorized, Workflow | Leave a Comment

I am searching for an excuse for the break in sequence on this blog. Travel in the US and Europe, falling over in Frankfurt (loss of dignity more than loss of blogging time), Rugby World Cup, the slow feet of age – take your pick of excuses, but one thing I cannot blame is lack of material. I have a stack of it left over from the summer, so perhaps it is the very volume that has intimidated me.

We have to start somewhere so lets start with Events. Of all the sectors that I cover it is the one most exposed to digital disruption potentially, and the one where existing players huddle because they mistakenly believe that it is the most resistant to digital market impact. However, it is now possible to see signs of greater niche specialization going forward, and a recombination of events with digital services. Yet you seldom see signs of the sort of intensive digital exhaust data re-use that people like me predicted five years ago. In M&A terms the sector commands high multiples, understandably, because of its cash generation and margins profile, but also, I suspect, because of this “safe haven” characteristic. And because many participants thought they were the last inheritors of the the Lost World of Advertising. In fact, though, one could argue that events should be more profitable, and that vertical specialization will root them into all other sector services and solutions.

So I was really interested to see Comexposium buy the Digital Marketing division of DMGT (dmg events). Dmg events has always been an area of difficulty for DMGT – starting with great consumer show assets like Ideal Homes was not the ideal entry point for a company whose thrust is now determindly B2B, and as the events division re-formed around the new direction dmg events certainly did not mirror the successful investment path in areas like land and property in B2B. Meanwhile other operating units like Euromoney developed their own events independently.

This is not to say that dmg events did not make a real contribution in its best years. However, refining and concentrating the portfolio, even if it means getting out of the digital marketing sector, seems like the market mood at present. And for Comexposium, who have Mobile Media Summit, Digital Marketing One to One, and E-Commerce already, adding the ad:tech, iMedia and Digital Collective shows makes a great deal of sense. And, as is increasingly the case with these portfolio re-organizations, we are talking about global coverage in a niche which is both global and local. And immediately it becomes clear, to me at least, that the risk element here is far greater than participants who believe they are working at the “safe” end of B2B currently suppose.

Though it has gone quiet, there is no reason to suppose that UBM is not still trying to sell PR Newswire, even if it does not make the sale with Cision. Those resources, set to work on sorting the UBM events portfolio, could make a great difference. There is plenty in the market to buy, and, as Informa demonstrated with Hanley Wood, even niche players will sell their events portfolio if the price is right. There is obvious tension between the view that you can always hold onto you community and start again, and the view that people always return to old stamping grounds (the Frankfurt that felled me this year was my 48th). But I sometimes feel that the sort of analysis that goes into risk of deterioration in event quality starts on a far too simplistic level. And every time a “fad” passes across the face of the marketplace there is a risk that market players will think that something has come and gone, that they are somehow safe from that particular risk. Yet the lesson of digital marketplaces is that everything that appears to have “failed” then recurs, in another guise and stronger ever than before.

“Community” was all the rage 5 years ago , as we sought to apply a new generation of eCommerce tools to service environments. Then we became avid data collectors, trying to capture every keystroke of our user connectivity in order to second guess user predilections. Now we sit squarely in the world of inaptly-named Big Data, and I really wonder why some of the heat seems to have gone out of the game of using events-derived data as a way of refocussing the whole information services and solutions approach to B2B. Where else in the cycle do you have users who are identifiable and trackable, whose event cycle can reveal concerns and interests and who can be plugged into intelligent systems both to optimize their event time and to develop other, customized service shells on their instruction. The potential for using events to rebase a services marketplace is so great, in my view, that if you own a data business and have no aligned event, or own an event and are not developing an aligned data business then you are in a position of strategic peril.

In the world I envision Reed Expo and RBI will join back together and refocus, EMAP will wonder why it ever thought it could sell its events without its data services in aligned packages, and data players will scout the events start-up potential of their holdings. When I last said this, to the 80th UFI Congress in Seoul in 2013, I received kind but inscrutable smiles. In the two years that have passed since then my confidence has risen almost as steadily as the valuations of key events.

Aug

25

That Ghost in the Machine

Filed Under B2B, Big Data, Blog, data analytics, Industry Analysis, internet, mobile content, online advertising, privacy, Publishing, Search, social media, Uncategorized, Workflow | Leave a Comment

There has to be a better way. Seven times have I raced to the telephone today, and seven times have I been greeted with “(pause ..click.) Here is an important message about your insurance/ mis-sold PPI/ tax filing etc etc”. I have put my name on every register but still the intrusive rubbish pours in. My mail box is full of it, and the kindly folk who send us magazines pack a few between every page as well as on them. This dandruff of sales offers is perfectly understandable and indeed some of my best friends, the nicest people you can imagine, make a living out of creating space – filling promotional gunk. And, even worse, many of my clients depend for a revenue stream on selling that space. But I cannot be the only person on the planet who feels exhausted by fending off the intrusive presence of advertising, and feels like saying “When I’m ready to buy, I will give a signal!”

Yesterday I read a fine and stimulating article in the Observor by John Naughton (http://gu.com/p/4by3j), a commentator I much admire and who I have often quoted here. He entitled it: “Is this really the beginning of the end for web ads?” And he cited his use of the Ghostery app to measure the numbers of services watching him using the web in order to find out what he was doing in order to serve him an ad. He counted 31 trackers, and he also quotes a Mozilla engineer as looking at a page served by a well known tech site and finding that the “content” comprised 8k of storage and the ads 6 mb. And we wonder why, in bandwidth starved, fibre-scarce, pseudo-broadband Britain, pages take so long to load! And by now you will be ahead of me, I suspect. Put together the trackers and their bandwidth use, and the ads and theirs, and any school child with a smartphone who wants to get a decent upload time ( – to quote Naughton, we are talking about loading a page to an iPhone in 2 seconds as against eleven at present – ) will load ad-blocking software. Apple, who have no skin in this game, have revised IoS9 and the iPhone release due in the autumn with heavyweight content blocking facilities. They will not be universally effective but think of this: online has the greatest potential for advertising of any medium we have yet acquired for communication purposes. You can track an ad, fit it precisely to your customer’s behaviour, adjust it so readers react to it – and yet advertising in the network has never commanded the rates that it did in the pre-digital world.

So let’s follow the Naughton thesis a little further. Imagine the revolts gain strength. Resentment at the intrusiveness and cost of receiving all those online ads turns into a global movement that blocks them out. Network speeds improve and user costs go down, but that part of publishing that still depends on advertising for a revenue stream takes a further big hit. This will be offset to an extent by Buy Buttons in apps and by brand sponsorship to promote them.

But in a world where users demand free information – and can get it – subscription is not the complete answer in filling the consequent revenue deficit. And providing services, in which information is a part of the deal, is certainly a part of the solution, but how many service vendors do we need? Recent evidence seems to show that users value a dominant incumbent, a challenger and an innovative newcomer – but not much else.

We shall certainly have sponsorship, and that may be a growth point. And it is not hard to imagine the rapid growth of brokerage businesses designed to introduce buyer and seller. I know many in the software sales area, and they infest travel markets. As a general rule the B2B brokers tend to build brand by word of mouth while their consumer equivalents are big brand advertisers – and may be the big brand sponsors of the future. In a world where you buy your Olympic Games coverage from Amazon, watching the Expedia 100m final may make a lot of sense. And Expedia advertising online may not.

This year has seen another new flood of Internet service start-ups. I think we now have to look very carefully at the funding of advertising dependent services in the years to come, and ask where the revenue streams come from in a world where the advertising balloon is deflating. The next DotCom Bust, and we can be sure there will be one, will have The Decline of Advertising running through it like Brighton Rock.

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