Nov

9

Monty’s Flagging Circus

Filed Under Blog, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized | 1 Comment

Oh, dear. Why, O why, when business models fail, do bankers and businessmen fall victim to the idea that if we did things bigger, cheaper, or louder then the old magic would return? These thoughts came to mind while attending Marco Rodzynek’s wonderful NOAH investment show this week: inside the hall we were all pondering how to invest in innovation, while our newscreens were full of images of David Montgomery, looking as inscrutably Calvinist as ever, getting ready to cut jobs and take the hard decisions necessary to keep the newspaper industry alive. Local World, the Montgomery vehicle, is prepared to absorb Northcliffe and the tiny Iliffe – as long as Lord Rothermere and Lord Iliffe leave some money on the table – and just about everyone else in British regional papers. The idea is that if one builds Size, and removes any local overlaps, and removes the distraction of too many advertising opportunities, and concentrate production in a handful of regional centres, and raise prices, then the regional press will once again become an attractive possibility for UK investors. Trinity Mirror are reported as havering, Johnston Press have said “no” (Ashley Highfield, its CEO, remains my best bet for “Inventor of Whatever It Is Which Replaces Local Newspapers” – remember you read it here first!). And I have to add that the last Montgomery vehicle, Mecom, did valiantly with this idea in Northern Europe before it too succumbed to circulation falls, advertising downturns, and the sad, underlying truth that not enough people of the right age like local newspapers anymore. A German victim of this process once claimed to me that Monty did  more damage to the German newspaper industry than the eponymous Field Marshal did to the German economy, but for a brief while it looked all right. Then it looked all wrong and hit the buffers.

So Local World has form. But does it have a chance? My own view, after the Fish4 experiment of the 1990s, is that the UK regional press has lost touch with “local” – and rather than rationalization, it needs to rediscover the proximity, recency and inter-activity which will characterize the services that they next offer. Just “going digital” doesn’t cut it. You can “migrate” into a cul de sac on the web – as Johnston Press have demonstrated. You can “transition” into pure opacity, as Trinity Mirror have shown. If your future is on the screen of a smartphone then even laying claim to being a newspaper may be pointless. But these businesses need to do something while they still have profits (aka re-invention time) to shelter them into the next phase. The £1 bn plus price for Northcliffe that DMGT’s board refused just six years ago now equates to a £200 m stake in Monty’s Local World. Surely that is a sign of the sands of time running out quicker towards the end of the game?

Now if Mr Montgomery had taken time out from all of this exciting dealmaking he could have encountered the future at NOAH. Not the future as described by people like Rupert Murdoch, whose online newspaper, The Daily, appears to be losing touch with its targets. The Independent last month reported it as having 120,000 unique users, while it needs, after 9 months, some 650,000 subscribers at $39.9 to break even. Smaller than the Ohio paper, the Toledo Blade, sneered the Indie, from the advantageous position of being smaller than both. They should all have sat still and listened to Jens Mueffelmann, Head of Digital at Axel Springer Verlag. Here the game is partnership and investment – not picking winners, but getting some skin in lots of activities which, as they iterate, will give direction and confidence to building futures. Can you do this as a sideshow? No, they have invested over 1 billion euro in 140 companies. Do they own everything? By no means. They always leave the management with a stake, and now partner with General Atlantic, who have 30% of the business for 237 m euro. This in turn enlarges the investment pot and brings more skills to bear on further acquisition. Axel Springer Digital Classifieds now dominate classifieds in Europe as the largest European player with 80 million uniques per month. With revenues forecast at 982 m euro, and EBITDA now edging up towards 30% something really interesting is happening here, and happening at real scale. But throughout the session the keywords were “experimentation” and “collaboration” – we are not the “colonial masters” in this new empire, said the speaker – we are a digital shareholder learning as we go.

And yet, of course, parts of Axel Springer, owner of Bild and Die Welt, really are traditional media. But they are run by businessmen prepared to stand back, listen, and catch at the drift of history. Later in the day I listened to a panel talking about television, and once more found myself  astonished by the confidence that existing players have in brands and positioning – and the enduring power of channel and broadcast and intrusive advertising. All that the television world lacks is really good metadata in order to enable a programme guide which would allow you to follow the television that you like, and arrange it into time patterns that suit you. Once that tagging can be ascribed automatically, we shall be able to test whether most people really do want to see the event when it is broadcast – or cheaper and later and ad-free. This panel was superbly complacent about piracy, and had no thought that their industry was overpricing, over-bundling, and too inflexible to change. In fact, just like the newspaper industry of the 1990s. Or the music industry. In the next three years these forerunners will seem mild exemplars compared to what happens when television unravels in the networks. Then Mr Murdoch really won’t know which section of his empire is the Good bank and which is the Bad!

Oct

19

DQM and the Market of One

Filed Under B2B, Big Data, Blog, data protection, eBook, Education, eLearning, Financial services, Industry Analysis, internet, mobile content, online advertising, privacy, Publishing, social media, Uncategorized, Workflow | 1 Comment

I thought it might be a restful day. After the conferences, after Frankfurt, try another conference, in a different field, and attend as a spectator – NO Speaking. Add the fact that this one was to be held in the Royal Institution (Faraday’s lecture theatre is a favourite place) and that I was invited by an old friend and I anticipated a light day catching up with the good folks in data marketing and what we used to call “list cleansing” years ago. The hosts were DQM (Data Quality Management), who I have known for a long time in different manifestations and the meeting was organized by their magazine, DataIQ, who have developed ways of benchmarking and replicating best practice in data management (www.dqmgroup.com). I settled into my seat prepared to be mildly re-educated: by mid-morning I was in a state of shock, and by the end of the day I was sure that another significant convergence was now locking into place.

Just think back a few years. For the information industry, preposterously concerned with their own proprietory content, data management of this type was simple housekeeping. Keeping lists of customers and prospects in good order was a non-strategic mid-level task. But now we live in a Big Data world, and while speakers urged us to see this as developmental as much as revolutionary, and pointed out how old the concepts are, there was still a feeling in the air that we could know so much more about customers and prospects that our chances of selling them something they wanted were increasing all the time. John Belchambers from Telefonica and Colin Grieves from Experian both hammered home the lesson, but as they were talking about global corporations and global marketing, my head was working furiously in the information products and services space. Think through the future of marketing information and the future of “publishing” (or creating information services and solutions) and you come out at the same place: The Market of One.

Noel Penrose, the former COO of Interbrand, made a vital intervention when he reminded us that Brand can be valued, and so can Data. We are not living in a place where data becomes commoditized if we are perpetually developing market-leading techniques for qualifying and comparing it. It was around this time that I saw why the agenda was dovetailed between speeches by two eminent futurologists. Melanie Howard, the chair of the Future Foundation advisory service began the day in fine form, and Dr Ian Pearson, formerly BT’s futures man, ended it. Both gave excellent value in predictive terms, but their effect on me in terms of  the information marketplace was to drive me towards the Market of One prediction and what it means for all of us.

They reminded us of some things that we should know already. Demographic change should be the first stop in every strategic enquiry. In a sensor dominated society, each of us will be in receipt of 2 gigabytes a day of unsolicited content, and equally, as we walk and talk and move around the networks, we shall create as much again each day. While we talk about “mass customization” in a hopeful way, the drive to personalization, both in terms of marketing  and services, is surely inexorable. Having just come from Frankfurt, where I moderated a panel on what we called “network publishing” I can testify to the willingness of producers to think about “customized textbooks” (CourseSmart) or custom workflow for lawyers (Wolters Kluwer Germany) but can we really see beyond that?

Christine Andrews, DQM’s Managing Director, certainly sees the regulatory issues (another round of European Community privacy law belt-tightening is due in 2015), but sees beyond it as well. One of the criteria for value may well become the quality of data governance in a business, and its ability to audit and report its own performance. But she is very right to point to the barrier that consumer-based legislation creates at the moment – and will increasingly in the US as that market catches up with European concerns. So turn that upside down for a moment. I could well predict, from what I heard this week, that we shall see a market where the power of the customer steadily increases to the point where powerful consumers are able to save and make private all aspects of their performance as network users, enabling them to sell it back to suppliers and marketeers in return for – coupons, discounts, customized products and services. In this permissioned world we shall have different levels or strata of market optimization – I can make this service fit a class of people who behave like you, or to fit your behaviours specifically.

So what classes of data will have most value: objective data, derived from observation of what happens on the networks which is commonly usable by all, or subjective data, derived from individual transactions and owned by the individual themselves? The latter, I imagine, but by gaining permission to use the latter, or enough of it, we could add real value to the former. This is what the Financial Times do, I hope, when they assess the reading habits of 300,000 recordable readers every day using Deep View. The inestimable Chuck Richards at Outsell took us down this track in his note this week (October 15) on 1 to 1 marketing, which also indexed companies like IDG Techsignals and Scout Analytics (www.outsellinc.com).

I came down the road from the Royal Institution grateful to my hosts for a reminder that the future is part of the present, and that marketing data and content data are all data in the context of an individual customer’s requirement.

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