Gasta News: Report from NMA Editor Justin Pearse

The Phorm saga rolled on this week, with the announcement of the departure of four members of the behavioural targeting company's board. It could be argued that the appointment of ex-Ofcom executive board member Kip Meek as one of the replacements was more significant than the departures for a company fighting regulatory and PR battles on all fronts, Meek's experience in the regulatory arena at Ofcom, on a European as much as domestic level, will be invaluable. Behavioural targeting itself got a welcome boost in support with BBC Worldwide's plan to launch it across its international website BBC.com. As large publishers board the behavioural targeting bandwagon, it should help to build a level of confidence to help address the reactionary hysteria it so often generates.
Targeted advertising has always been one of the promises of mobile, of course, although the operators' reluctance to release deep customer data has stymied this somewhat. Content providers, although happy with the traffic operator portals generate, are desperate for more control. So it was a heartening sign to see Sky start selling advertising around its content on the T-Mobile and Vodafone portals
Bauer is the only other content owner to do this. The resulting control should help encourage publishers to commit further to mobile advertising but few will have the market muscle to force such deals through to operators. Especially as mobile advertising is failing to meet the lofty heights its hype promised. One of the reasons behind O2 launching global media sales division O2 Media Group. The move is designed to let O2 sell integrated ad opportunities across its entire real estate, from mobile and online to in-store and DM. Rival Vodafone is also planning a similar offering. As all operators look to bolster their online operations, such holistic views of themselves could be powerful in convincing media agencies and advertisers to view them as media companies rather than telecoms suppliers.
Towards the end of the month came news of the government's tacit admission of its lack of understand of the new media industry. The IAB began a programme to educate civil servants in government departments from the DCMS to Berr. The move generated mixed emotions. On the one hand, anything to increase government understanding of the fast moving digital industry is to be applauded. On the other, it could be seen as worrying this education was needed following a year of increased regulatory attention to the internet by government, from Andy Burnham’s speech on the readiness of the internet for governance, to the Byron Report and the Council for Child Safety.
The evolution of online video and internet TV is clearly one area where regulatory confusion will see increasing government attention over the coming year. The sector is moving so fast that multi-platform commissions are becoming commonplace. However, the complexity of getting such projects to market was highlighted this month with Virgin Media's delay of launching Prom Queen due to the lack of a sponsor. Sony Pictures Television is the latest to be searching for distribution partners for its multi-platform series Gemini. The three minutes series was broadcast in the US by Amazon Unbox, NBC Online, NBC Mobile, Xbox Live and Zune. Just the type of fascinating broadcast model we'll be seeing more of in the UK in the coming year.

Gasta Advetising set to grow

Find the online opportunities in your own backyard: Gasta.com

Billions of local ad dollars will be moving online in coming years. Find out which outlets offer the best potential returns.

These days, the advertising community is focusing its attention on how to create ads for online media -- including video, rich media, Flash, etc. -- and the revenue potential associated with these channels. However, a less-often-asked but vitally important question in terms of industry shift, as well as dollars and cents, is this: Where will these ads be placed?

Industry estimates suggest that mobile advertising will reach nearly $10 billion in the next few years, with online video reaching nearly $3 billion. However, advertising at the local market level -- although not as frequently discussed -- has the potential for even bigger numbers and greater growth. What's more, local advertising isn't at odds with mobile and online video, as many assume. Rather, rich media and geotargeted place-based mobile advertising are likely to be big components of that local online ad spend. Within the context of the changing media landscape, local online advertising represents a massive opportunity that is coming into its own -- and bears more attention from the advertising community.

Tip O'Neill once said, "All politics is local." And while that's not quite true of advertising, it does resonate when assessing this new shift into hyper-local marketing and advertising. According to eMarketer, $97 billion of the $157 billion -- more than 60 percent -- of the advertising market in the U.S. is focused on local. The online portion of that has thus far lagged behind the other advertising channels, with only about $2.1 billion -- 2 percent -- of local advertising being online at the end of 2007. However, that number is expected to more than triple over the next four years to more than $7.8 billion. That's a huge movement of dollars shifting toward reaching local audiences online.

But where are these dollars going to end up?

Although traditional local media -- Yellow Pages, newspapers, radio and broadcast television -- all have an online presence, none of them enjoys the dominance on the web that they do in their "home markets." Yet their audiences are moving online at faster and faster rates, resulting in major drop-offs in print subscriptions to newspapers, broadcast TV audiences, terrestrial radio listenership and Yellow Pages customers.

For example, the Kelsey Group recently found the erosion of print Yellow Pages is going to increase from 2-3 percent to more than 10 percent this year. That's a pretty massive decrease year over year. And even the Yellow Pages Marketing Association concedes that although online usage of Yellow Pages is growing, a 10 percent drop in print usage dwarfs the increase in online searches. Newspapers are in a similar boat with their advertising; online ad sales are climbing, but offline usage declines are taking a larger chunk of ad sales away from the industry as a whole.

And yet, projections show online ad sales more than tripling -- and there has to be a place for all that advertising to land, outside of the traditional media's online presences mentioned above.

With Google, Yahoo and online Yellow Pages growing their audiences, there is certainly going to be growth in local business searches. But what about brand advertising and trying to reach people who are migrating away from traditional television, radio and newspaper outlets for their news?

The numbers are a little grim. There are about 1,400 daily newspapers and 7,000 television and radio stations in the U.S., and back-of-the-envelope math shows that they each produce about three to six stories per day, or about 22,000 local stories for the entire U.S. This for an audience of roughly 20,000 individual cities and towns. All these players used to be able to back up their locally produced content with national stories, thereby providing a full news experience for their viewers or readers. But, the internet has changed all that; people get their national news from national sources. Instead of competing with other local newspapers, papers are competing with every news site that has a web page. Given this fragmentation, local news sites are not maintaining their market share.

So what's going to take up the slack?

Well, nature abhors a vacuum. Thus, amateur, user-generated content and commentaries are taking off in local markets. The internet's solution to the dearth of local news coverage is the same as it has been with other problems of scale: let the people build it themselves. Similar to Wikipedia, the Open Directory and Usenet, truly local content is going to be provided by the people who live there.

In looking at sites like MetroBlogs, Gothamist publications, Outside.in, NowPublic, Baristanet and Topix (the site that I run), it becomes apparent that a massive amount of attention and investment has been paid to giving people a platform for engagement with the places they live. And while social networks (based on who you know) like Facebook, LinkedIn and MySpace have generated a lot of usage, and even more buzz, none of them has really provided a locally contextual venue. You are unlikely to meet the neighbors who live two blocks away via Facebook or LinkedIn. However, when that same family starts blogging about your neighborhood or commenting on something another neighbor wrote, it's a compelling discussion -- one that you're likely to read and possibly even join.

Given the aforementioned advertising growth and the decline of the traditional places for it to go, user-generated content is where the action is going to be. The local online outlets that make the most sense for a given campaign will vary greatly depending on where you live and who you're trying to reach with your advertising. But the potential audience size available through these channels is impressive. Speaking for Topix, we've seen comment rates go from around 30,000 comments a day in the middle of 2007 to more than 140,000 comments a day -- or more than 3.5 million comments a month -- across more than 20,000 cities and towns within the U.S.

Media consumption and local audiences' preferences are shifting. Advertising is going to shift as well. So along with that cool viral video and mobile campaign, consider how you can make the most of region-specific opportunities as the $97 billion gorilla of locally targeted ad dollars spent in the U.S. starts to move online.

Chris Tolles is CEO of Topix

Gasta News: Sky Music

Sky is set to launch a digital music store, in a bid to take on the likes of iTunes, HMV and Tesco.

Sky has partnered with major Universal Music to enable visitors to download thousands of songs from its artists including U2, Girls Aloud and Kanye West.

The service will be available for a single monthly subscription charge and users will able to both stream songs on-demand and download tracks. Customers will be able to listen to tracks through a range of devices such as iPods, MP3 players and mobile phones.

Sky, which plans to partner with other major and independent record labels, for the joint venture service, said it will roll out the digital store later this year.

Mike Darcey, COO at BSkyB, said the service is being set up to meet consumer demand for online music.

"Companies like Sky and Universal Music are well placed to work together to meet consumers' needs. We aim to offer an easy and affordable service for all UK music fans, while ensuring that artists are properly rewarded for their creativity."

Lucian Grainge, chairman and chief executive, Universal Music Group International, said, "The new Sky service will provide a compelling digital music experience, built for the ever growing digital appetite of music fans. In a world where a majority of UK homes have high speed broadband access, consumers will welcome a safe, state-of-the-art service and legal alternative to those services which exploit musicians without compensation."