Online Publishers Struggle With Competitors, Ad Technology

By: Carl Sullivan Advertising was a predominant theme Tuesday at the Interactive Media Conference & Trade Show being held here. Speaker after speaker warned the online publishers and broadcasters in attendance about the rapidly changing media environment, where the fierce competitors of today will be the has-beens of tomorrow, and where dangerous upstarts and new technologies that we haven't imagined can suddenly upend all the fundamental rules of the online landscape as we currently know it.

Keynote speaker Christopher Schroeder, vice president for strategy at The Washington Post Co., offered a litany of Web sites which are siphoning away business from traditional publishers: among them, Craigslist.com, Expedia.com and LendingTree.com.

Schroeder added that the pay-for-performance search phenomenon has serious ramifications for traditional media. At the very least, the trend will put downward pressure on the cost of all advertising, he suggested.

Pay-for-performance leader Google was on the minds and lips of many speakers and attendees here -- and not just because the soon-to-go-public Web giant threw a great party Tuesday night. Don't try to "out-Google" Google in terms of technology, Schroeder advised. Instead, focus on what local media does best -- such as offering an understanding of the nuances of local markets in ways that national players cannot.

As an example, he said a local player such as The Atlanta Journal-Constitution knows the difference between Italian restaurants in Midtown versus those in Buckhead -- two distinct city neighborhoods that probably wouldn't register on some national search sites. In addition, newspapers can tell users which of these restaurants is good for kids, which ones are ideal for romantic dinners, etc. Google's new local search can't offer this kind of detail, Schroeder suggested.

With all the buzz around paid search and contextual link advertising, publishers shouldn't forget about branding, Schroeder said. With their high-quality audiences (in terms of income, time spent online, etc.), newspapers and broadcasters can offer marketers a great opportunity to capture passive buyers.

One form of advertising publishers should avoid is pop-ups and pop-unders -- at least according to Pete Blackshaw, chief marketing officer for Intelliseek, a marketing intelligence firm. "We do our advertisers a disservice if we aren't honest about" these popular ad vehicles, he said, predicting that 80% of Web consumers will have pop-up blockers by the first quarter of 2005. Internet Service Providers may even begin to market themselves as "pop-up free ISPs." Blackshaw asked whether the industry really wants to go down that road.

He also pointed to research that suggested consumer displeasure with how advertising in one media can affect their opinion of others. If consumers feel like they're being hit with a plethora of annoying Web ads, they'll think that they're also getting more ads when they watch television -- even if the number of TV ads hasn't actually increased, Blackshaw explained. All forms of advertising get painted with the same dirty brush.

Dick Hopple, CEO of online advertising company Unicast, said consumers are less likely to be annoyed with multimedia ads if they play in accepted ways and in formats that are familiar. He pointed to his company's new interstitial format, which he likened to television commercials that come between content -- not on top of it or in the middle of it, like pop-ups and other vehicles that dance across the page or pierce our eyeballs with seizure-inducing flashes.

On the content side, MSNBC.com Managing Producer Jonathan Dube warned that news sites that don't get interactive and engage their audiences risk losing their audiences for good. Several speakers throughout the day mentioned the increasing amount of time that young people are spending with very untraditional media devices, including cell phones, other wireless devices, and even video games. CNET Editor-at-Large Brian Cooley suggested that video tutorials by Web site editors build rapport with readers while reader-generated reviews and other content makes readers feel empowered -- they become sort of co-editors on the site. Just be sure to somehow clearly distinguish between staff editorial and user-generated content, he added.

Another major theme of the day was the preparation for the next wave of technology. The industry must figure out how to effectively publish in the mobile environment, Dube said. There are more cell phones today than there are land lines or PCs, he said, so why aren't we formatting our content for phones?

After a panel on Web site registration, one conference attendee asked how the spread of cookie-clearing software by privacy-minded consumers would affect audience management. Neil Budde, president of his own consulting group, predicted that developers might devise a system that would allow consumers to white-list cookies from their favorite and trusted sites -- so that they don't lose their registration data every time they clear their cookies.

Despite the daunting challenges, media executives were largely upbeat about their prospects going forward. Many pointed to record-breaking online revenues and the widespread adoption of user registration, which is allowing sites of all sizes to perform sophisticated ad targeting. Publishers now must focus on educating their advertisers about the power of these demographic and behavioral databases, said Alison Scholly, general manager of Chicago Tribune Interactive.

And traditional media companies need to hire more members of the next generation to work in their new media divisions, said Donn Friedman, online editor for the Albuquerque (N.M.) Journal. He noted that most of the attendees of this year's Interactive Media Conference were middle-aged. If publishers want to attract young people, they should bring in some new blood, Friedman suggested.

The conference is sponsored by Editor & Publisher and Mediaweek magazines.