Category Archives: The Economist

The forces driving The Economist to Facebook


Word came across the pond today that stiff-upper-lipped Economist.com plans to acquire half a million Facebook fans in the next six months. Publisher Ben Edwards told The Financial Times that making The Economist more social is “the core of our strategy.” What gives?

Let’s view the world of publishing competition as a play in three acts. Act 1 began 100 years ago with Michael Porter’s classic five forces model. (If you haven’t read Porter, the genius who coined the phrase “competitive advantage,” all you need to know is five things act on any organization — suppliers upstream, customers downstream, competitors in your space, and potential substitutes or entrants. This works in marriages, too, but we digress.)


Publishing thrived in this model nicely, with the nuance that it really served two sets of customers, the audience who watched TV or read the magazines and the advertisers who in turn chased that audience. Since advertisers fund 90% of any publishing venture (subscription fees are but a pittance), the size of the audience was paramount.

And then, in the late 1990s, the Internet and Google reared their heads … and audiences began to move south.


This second act of the publishing era gave us the Andersonian Long Tail, or what we call “The Era of Search Substitutes”: readers rushing from paid subscriptions to millions of free web sites, anything you desire found via Google.com. Because audiences were so vital, publishers gave away a portion of their wares online for free in hopes of luring readers back, opening a Pandora’s box of declining print circulation and ad revenue.


And then in the past two years, audiences moved again — to Act 3, “The Era of Social Entrants.” What at first seemed online games for flirting teenagers became tools attracting millions of users, who could follow breaking news inside Twitter faster than CNN and network professionally with thousands of new contacts without the onerous ping-pong of email. The iPhone, the first portable device with easy Internet access, pushed the trend, and next year both Apple and Dell are set to release larger-screen mobile tablets that will take portable interactivity further.

Can publishers rebuild subscriptions in a new sharing world?

Once again, publishers face a threat, but there is also hope of more control … since marquee brands can sound their own voices in social media forums. Tablets are being eyed especially closely, since they provide a narrow window for publishers to improve their content in exchange for new paying subscribers. (See this Sports Illustrated tablet demo for a sneak preview at their tempting tablet layouts.) The trick will be to move beyond gimmicks to give users some skin in the game; The Economist, for instance, will encourage commenting inside Facebook and Twitter by building a new Economist.com “reputation system,” similar to the rank-scoring mechanisms of “follower counts” that make Twitter so popular.

Since social propagation can’t be controlled and requires constant experimentation — there is a Talebesque randomness to the fads that “go viral” — The Economist is making managing its social media presence a full-time job. Major retailers are moving this way, too: Pepsi just announced it is skipping SuperBowl advertising in 2010 to instead drop $20 million on social media experiments, and Amazon.com now provides widgets helping bloggers link its online products for a cut of the sale.

The Financial Times notes “broadcasters … are finding that mingling with the huge audiences gathering on Twitter and Facebook can be a source of traffic to rival that of search engines.” Perhaps this is a wake-up call for your business, if you’re still focused solely on your advertising, web site, or search presence. What are you doing to attract the rising crowds in the social entrant space?

Economist photo: Suttonhoo

The Economist to Facebook: Blah blah blah


Some people just don’t understand Americans. Look, if we believe it, it must be so. Harper’s just noted that despite all the gloomy press about recession, 55% of us Yanks believe our homes are still rising in value. That’s right! It’s too bad those guys at Bear Stearns lost their shirts by hyper-leveraging derivative instruments created in brimstone by dark computers based on a home loan some guy in a shiny suit sold to people with FICO scores in the 300s who didn’t need to authorize their income and whom you wouldn’t let baby-sit your kid. Whatever. Our house is rising in value. Former Federal Reserve governor Laurence Meyer just told NPR that no one could see that crash coming. Of course not! Our house is rising in value.

Now, The Economist has a piece claiming that Facebook and MySpace are vastly overvalued because they can’t really monetize their user base, and goes so far as to compare AOL’s recent snap up of the Bebo social net to Microsoft buying Hotmail a decade ago. Sure, The Economist says, back in the day web-based email was lauded as an incredible communication innovation, but no one really made a buck by advertising on it.

And, to really throw cold water on us, The Economist suggests that all these social media will eventually morph into one big, ubiquitous feature of life. Just like that Charlene Li over at Forrester.

Come on, Economist. Does it matter if Beacon bombed, or if you can’t monetize widgets that toss sheep, or if social media users have changed modalities and block out advertising? Does it matter if people soon control their own online social network without 25 passwords? Those are details. We need a hot new thing. We need to believe. We need our home to rise in value. And besides, that Bebo has a really cool URL.

2008: The year internet ads will outpace radio


Deep on page 126, The Economist offers an illumination:

The internet will account for 8% of global advertising spending in 2008, says London-based ZenithOptimedia. For the first time, the web will outperform radio, which will account for 7.9% of global advertising outlays. The internet is growing six times faster than traditional media, and by 2009 will account for more than 10% of ad spending in 11 countries, including Norway, Sweden and Britain.

If you work in marketing and are not yet testing online ad formats, please, get started. The train is leaving the station and your competitors are on it.

Watching me watching you


The fun part about using a media planning blog to communicate with clients, ad agencies and marketers is the data we can collect. For example, the map above shows the location of computers who have visited THIS web site in the past two weeks since launch. Not bad, considering we’re reaching business leaders and our ad budget for this side project is exactly $0.

We’ve had 258 visits, an average reader stay for 8 minutes and 46 seconds, and we’re proud to say the fourth-most-trafficked city is London … perhaps because we’ve written two articles about The Economist and one was, ahem, rather negative.

Digging deeper, we see we’ve had three visits from “The Economist” computer network, er, at 1.67 pages per viewer.

Dear London lawyers: We’re sorry.

The Hidden Persuaders 2.0


So BusinessWeek and The Economist write exactly the same cover headline a few months apart slamming Google for privacy concerns. Seems Google may have too much data on YOU.

Coincidence?

We find it intriguing that WSJ now reports Microsoft is using surreptitious PR to undercut Google’s proposed $3.1 billion acquisition of online ad giant DoubleClick. Apparently Microsoft used PR giant Burson-Marsteller to send emails to business writers in the U.S. and Europe asking them to focus on the privacy risks of Google’s expanding online ad models. We don’t know if BusinessWeek or The Economist got the pitch, but both ran the headline “Who’s Afraid of Google?”. Both articles raised the ghostly spectre of Google abusing YOUR personal data, and painted Google as an emerging dark monopoly of online advertising.

Sounds very similar to WSJ’s investigation of Microsoft’s PR:

In recent months, public-relations firm Burson-Marsteller pitched media outlets and Internet companies on what it said were the dangers of the deal, which would bolster Google’s already strong presence in online advertising. In the written pitches reviewed by The Wall Street Journal, Burson cites the deal as part of a larger discussion of “fair and free competition” in Internet-search and privacy rights of consumers…

Adrian Webb, head of corporate communications at (U.K.) Esure, said he was miffed when he received the email since he sensed a Google competitor was behind the pitch. ‘Burson-Marsteller acts for Microsoft — this has not been stated anywhere,’ in the email, Mr. Webb said.

Well, if true, bully for Microsoft. All is fair in love and war. Exactly 50 years ago Vance Packard first wrote about the psychology of getting people to want what they don’t want in his landmark book The Hidden Persuaders. With bloggers now picking up the Google risk story, it’s nice to see the hidden persuaders of PR are still in business.

Invasion of the serious media


Brits at The Economist have seen U.S. circ climb 12% in the past two years, and now they’re launching million-dollar media campaigns in Chicago (this week) and other top cities to get us silly Americans to pay attention to world news. Seems The Economist is buoyed by the recent success of NPR in grabbing new audience share, and seeks to double readership in major U.S. markets. Media planners, take note: serious formats are still holding strong in print and radio among upscale, educated, affluent demos.

No word yet on whether they’ll increase coverage of Britney Spears.