Thursday, December 31, 2009

Print faces Google

Hilarious, loved the interactive game part.

As an engineer for a newspaper, I get to read plenty of technical stuff.

Yesterday, while visiting Google's AdManager it hit me: I recalled my disappointment when Google abandoned AdPrint, a system that would facilitate the process of taking ads in our print publications. I'm sure this was a tough decision for Google, they left on the table gazillions of dollars, considering that 90% of the ad revenue still originates in printed magazines and newspapers.

So, why did they do it?

Well, it's called "cutting the supply lines to the enemy". I still have a vivid recollection of how a small newspaper in Latin America climbed to a national circulation in the coattails of an overconfident leading daily. The renowned "diario A" agreed to haul "diario B's" newspaper bundles to subsidize their trucks' circulation costs —an unforgivable mistake, that "diario A" would soon sorely regret for years to come.

So, Google devilishly cut any aid to the frail print ad revenue lifeline —to assure its complete dominance of the advertising market.

AdManager is a wickedly brilliant piece of software, which basically acts as a traffic cop for the ad traffic into a publication, yielding at any moment, those ads that maximize the periodical's ad revenue.

The importance of technology (in wars) is well recognized since the time of the machines created by Alexander's engineers, which were the key to the submission of their besieged cities. Or, the more recent Brit engineering feat, the ingeniously gargantuan cement barges devised to navigate the British Channel and maroon in the less defended beaches of Normandy, meant to surprise as unloading docks for the hundreds of thousands of tons of equipment required for the invasion of Europe during World War II —the Nazis fortified the French ports, never imagining this flash of genius to the Allied disembarkment problem.

After foolishly bungling for years the reaction to the threat posed by the Internet's rising stars, printed periodicals face foes with magnificent internal technology developments. In our print world, technology is mostly outsourced, and what little is done internally does not suffice, —if the New York Times doesn't hold the flood waters, none of us will.

In other words, none of the old and established news organizations has developed systems as good as Google's, period. For an explanation, you might want to take a look at the hippo concept (from Avinash Kaushik's presentation) outlined in this previous post.

We also know that search engine technology has changed forever the advertising landscape, including that of radio and TV. In essence, search engines have solved the fundamental problem: the buyer's need to find a product; and in a very efficient and inexpensive way.

Adding insult to injury, the Internet allows news organizations universal and instantaneous reach, making wire news a repeat for the reader, and allowing local organizations to be cannibalized by their strongest peers. Further, Google facilitates millions of bloggers to have a free ride at publishing, with some very worthy and attractive commentators. As a consequence, content value has also diminished enormously.

I know these are all depressing negatives for anybody in the print business. So the real question is: how do we get out of this mess?

This problem is very similar to the one we face with China's manufacturing prices. There is no way of escaping the facts: labor prices in the rest of the world must come down to meet the lower price of labor in China. As well, print advertising prices must come down too.

So, the print industry must dramatically change to accommodate these lower prices.

Fortunately for news organizations, we (and our readers) are not machines, and probably computers will never get to be like us —according to the very convincing arguments of professor Bert Dreyfus.

In this respect, readers prefer to visit a select few places to shop for their news, —we seem to simply jump to the appropriate response, without considering any alternatives—, which is quite a positive for any small news outlet with good brand recognition in its local area, established over a long life of serving its readers.

Current technology offers the tools that allow us to further understand our readers like never before. It's a two way street, journalists need to commit themselves to this dialogue, or constantly adapt and align themselves to their readers' topics of interest —which by the way does not change the objective, it's always been this way, it argues for using these new tools to better serve our readers.

To sum it all up, with a current recession not helping, there's still a lot of restructuring to do to get to that advertisement equilibrium price in the print-digital news organization combo —although, breaking apart the news organization to allow for their individual optimization is a fundamental tenet to the overall solution.

But most of all, we all have to look at these very confusing times as opportunities, the dust will eventually settle, and the few that have learned to adapt will reap the rewards.

I leave you with this inspiring "Virgin" video from Richard Branson, who has repeatedly bought his way into companies against all odds and recommendations, if he believes there is a way out —which, I definitely do.

1 comment:

Anonymous said...

Very obvious solution:

Learn about technology. Insource it. Stop that nonsense that "content is king." Without suitable technology, content is a beggar. And others are making the money - rightly so.

Newspapers originally were started by people who are really really knowledgeable about printing. And still are (but printing gets meaningless).