Beware the creeping changes

monsters

Things that creep up on you can be the hardest to recognise and defend against. Whether they be imaginary spooks hiding in the dark to frighten you from your slumbers, or people quietly tip toeing up behind you to shout ‘boo!’ in your ear, if you don’t see it coming, it can be unnerving when it’s already upon you. Of course, you are at your most vulnerable when you have no idea what is about to hit you.

Last week I saw a stat that really summed up all the digital changes that have been happening over the past 15 years or so. Online advertising in Australia surpassed the A$6 billion mark in 2015.

6 big ones.

The growth is not slowing either; since 2010, online ad revenue in this country has been rising at more than 20% a year. Last year it grew 28%. Within this growth, mobile ad revenue grew 80% last year, and video ad income 75%.

Online ad revenue was almost zero in the year 2000. I remember that year well. It was probably the toughest year of my life so far. There were illnesses in the my family, two friends of mine succumbed to cancer, and it was first year of my fledgling tech startup. Our initial seed funding had run out, and we had passed the dotcom crash after which no more investment funds would be forthcoming. I had quite a few sleepless nights, and not a few doubts. We had a few real estate agencies on board, but very few were paying very much, and it was going to take a while for us to get to cash flow positive, let alone profitability.

A few years on, I remember when online ads in Australia went over the $1 billion mark (2003) and then within two years had doubled to A$2 billion. At A$6 billion, it is now the number one advertising medium in the country. Print ads have fallen to A$2.2 billion and set to continue their decline. Movie ads, radio ads, TV ads, are being left in online’s wake.

When I talk to online tech people these days I joke that we had almost 100% market share of the online real estate ad market in Perth in 2000, but unfortunately it was 100% of very, very little. But as the online market grew, we kept ourselves alive long enough (sometimes I wonder how) to take advantage of the creeping change that was occuring all around us. We built a nice little business out of this, with real profits appearing in year 5 and dividends paid to shareholders from then on.

Today, realestate.com.au (ASX: REA) is worth over A$7 billion (share price $55). In 2000, REA Group’s share price was a mere 12c (half its listed price of 3 years earlier). It was touted as yet another dotcom disaster, an example of greed overtaking common business sense. With 3 CEOs in 4 years, it was but a few months away from closing shop altogether. Or so the wise analysts thought. By 2008, it had billion dollar value, and now after another 8 years is seven times that.

We weren’t the only ones to see that real estate search was broken in the last century, and that the new one would herald a new way of finding your next home. Many people knew this was happening, but the incumbents paid lip service to the imminent threat. Very few people are crying for them now. The 2 weekend papers that once had huge real estate (and cars, and jobs, and boats…) sections in them that landed on your doorstep with a loud thud, are now so weak they are having to combine forces to give themselves a few years more life. In an isolated marketplace with little competition (bar online, which they don’t have much share of). They hide their limp real estate sections in among the cartoon section. A tie up that was once thought anti-competitive, is now being hurried through.

I was once in a boardroom of one of the main paper-based media empires during the early 2000s. Accosting me from across the table, one executive jabbed his finger towards me saying: “Why would we turn a $380 million business into a $38 million dollar business?” (the online ad market being much smaller at the time, his reasoning was why would be chase the internet market and so herald our own demise?). Pausing for a while to take in this question, I answered “Because you have to. And if you don’t this year, it will only get more expensive the next year, and the year after that. It will only get harder for you to make the change.” He glared at me like I had lost my mind.

In all of this is a lesson. Never take things for granted. At your peak, be your most worried. When feeling most comfortable, be nervous. Analyse what is happening, what could happen, what you could do to take advantage of things. Some things will lead you down dark alleys, some of it will be wasted time, dead ends, but you’ll be experimenting, learning, feeling your way. No one can predict the future, but the onset of online advertising was certainly something that could have been foreseen, in the same way mobile and video ads are now galloping along.

Get on trend, or be left behind.

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Newspaper circulation falls, and falls, and falls (again)

Circulation on the downer

The latest newspaper circulation figures for Australian media organisations make for more sorry reading. Every title, no matter how they try to dress it up (and, boy, have they tried) is in the red, as the graphic above shows (courtesy: ABC News).

Fairfax media seem to have totally given up on print’s future, calling the newspaper circ numbers a “historical production metric” (translation: they are so bad, we are not going to pay much attention to them anymore, in fact, they are a thing of history).

The bright side in all this is the growth in digital subscriptions to newspapers… err, sorry, media organisations.

‘Digital only’ paid subscriptions to the Sydney Morning Herald and The Age now surpass the ‘print and digital’ offer (interesting) and are almost as large as the ‘print only’. Total subscriptions though are well down, although the pace of decline has slowed.

Even our local print monopolist, the West Australian (apparently the most expensive, and best performing daily in the country) has seen subscriptions fall another 4.3%.

The Fin Review has (so I am told) 15,000 digital subscribers (not many for a national product) and the Australian around 55,000. Meanwhile, the Financial Times has 700,000+ print/digital subscribers around the globe, 70% of them are digital mix or digital only. The New York Times has 800,000 subscribers, and a team of 300+ staff to manage them.

A migration to digital platforms is now gathering pace. People who want quality news, specialised news, niche news, are increasingly OK with paying for it. Most people get their general news from free web sites, TV news broadcasts and (increasingly) Facebook feeds (i.e. the news that friends of theirs post daily). Facebook has even begun experimenting with its own Facebook news product (‘Instant Articles‘), so publishers can post directly onto newsfeeds of its 1.1billion or so users.

This major ‘print to digital’ trend is now the main game in news media organisations, and within digital (now the largest media category) there is a move to social and mobile.

Will print die? Interestingly, some commentators think it might still have a role ‘in the mix’. Albeit a smaller one.

When a wily investor like Warren Buffet forks out US$344 million for 28 local newspapers in the States (in 2013), then you know there is something of value still there. His reasons for this included the power local papers have to disseminate news to a community, who, bored of the depressing nature of the global news, turn to something they are a part of, and can understand. Newspaper organisations with a ‘sensible Internet strategy’ will do the best and can still make good earnings.

We live in interesting times.

 

On Demand, Everything

{ In flight entertainment of yesteryear }

{ In flight entertainment of yesteryear }

I think I was on my first long haul airplane flight 30 years or so ago when the idea struck me. Back then jumbo jets took 30 hours to fly to Australia from the UK with 5 stop overs. At your seat you could flick the channel of the entertainment system’s handset to hear comedy, the latest pop hits, or classical music. There were maybe 12 channels tops, but to me this was electrifying – imagine being able to listen to what you wanted, when you wanted, and go back around the channel again laughing along to your favourite comedy routine, or listening to your favourite tracks.

On that same trip I bought my first walkman (in Melbourne’s Victoria Markets) and slipped in a cassette (remember those?) of Michael Jackson’s Thriller. I listened to this on a continuous loop for weeks. Listening when I wanted, where I wanted, anytime. Reverse, play a favourite track again.

They say the head of Sony persisted with the Walkman’s development even though research suggested people wanted larger, bigger HiFis not a small mobile device you had to listen with headphones. He said, “No, this will be a hit – people are bored.”

Yeah, walkmans reduced the boredom of youth, but they also gave us instant entertainment, when we wanted it, on the move. It was the first mobile device, a forerunner of what was to come in the 2000s with the iPod, iPhone and iPad.

Back in the 1980s, the idea hit me that I (and millions more like me) wanted to consume music, or comedy, and favourite TV shows or movies whenever we wanted, at anytime. The idea of listening for the track on the radio or waiting to sit down and watch a show at a time appointed by someone else did not seem as good. VCRs were part of the solution, but were not mobile.

Perhaps it was around this time media splintered, and the era of mass broadcasting started slipping slowly away. Before this time, with maybe 3 TV stations across one country, a joke or event would pass into the national consciousness overnight. Everyone would be talking about it the next day. Everyone else had sat down and watched too.

No more. Apart from the odd realty TV show hit, we don’t seem to sit around and watch shows anymore. [Although even those wither on the vine pretty quickly.] We binge consume on DVD packs, from downloaded services or saved Foxtel IQ. We want it now, whenever, at anytime.

This desire for ‘everything on demand’ was always there, but untouched. Now, it’s the new normal. It’s a challenge not only for media, but for every business out there.

The shift to mobile {slidedeck}

A few weeks ago I presented at the inaugural BigTech13 conference in Perth; topic was ‘mobile and its effects on business’.

I spoke about the shift from print to online, and then within that shift is the shift to mobile (and within that will next be the shift to wearables). The thing about these changes are they are slow and inexorable, but if you ignore them (and they can easily be ignored) it only gets more expensive to fix them later. And if totally ignored, they could spell the end of your business.

In my Dad’s case, his brain tumour (thankfully benign) is a story I tell to show how no one saw (including me) that Dad was getting worse, as the blasted thing was growing inside him for 5 years. It was the size of a golf ball by the time they got it out.  I start the talk with another favourite Dad story, some 50 years earlier just before D-Day. He was horribly lost leading a convoy down a small country road. The only way to turn the convoy around and get back on track was to use a field to U-turn them all inside. Sometimes managers prefer to carry on in the wrong direction. It takes a brave one to admit they are wrong, and often lateral thinking is required to come up with an answer to shift the organisation.

Prezi version of the talk: http://prezi.com/6_sqr8plxaht/the-shift-to-mobile/

Mobile takes centre stage


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Three years ago I wrote one of my first ever posts, ” Trend for 2010: it’s mobile stoopid!” Later that year the iPad was launched and the trend to mobile stepped up another level.

Consider these stats:

* Australia – 14th in list of countries in the number of smartphone subscribers (16m) = 50% of total phones, 44% growth year on year. China has 240m subscribers (24%)
* only Japan, Korea, Canada and Sweden have greater % smartphone penetration (Jap 65%, Korea 59%, Can 55%, Sweden 54%)
* 1b smartphone users globally, compared to 5bn phones (so there’s still upside)
* globally, 13% of all internet traffic is on mobile (up from 1% in 2009, 4% in 2010)
* in India, mobile internet usage surpassed desktop internet in mid 2012.
* mobile app revenue worldwide is a US $19b industry (up from $0.7b in 2008)
* 2013 – number of tablets + smartphones exceeded desktop + laptops in operation
* 2002 – number of mobiles surpassed landlines (which peaked in 2006) and is now 4x landlines
* 2008 – number of smartphones with cameras shipped exceeded the number of cameras shipped

For more: Mary Meeker “Internet Trends” Report Dec 2012, KPCB

Ten Tips on building and promoting your App

apps

1.Mobile is a marketing medium, that’s it. It’s a priority because it gets results, which you need to measure – does it generate leads, get more listings, branding, improve custom service?

2.Your app will brand you like nothing else around at the moment – more than QR codes or SMS databases; an app says much more about you, and permanently connects you (like nothing else can) to your clients

3. Smartphones and tablets are fundamentally different devices, you can’t design for all 3 screens. Layout is different. Engagement is much more on phone or tablet (maybe because users are lazing on a couch, not hunched up over their work computer)

4. Don’t jump into implementation, define what you want out of it, define your strategy, determine the sucess metrics, THEN implement.

5. Developing the app – lay out screen shots with your app designer and users and think through how navigation work. Flui is a good online service for this.

6. Push notifications can send information to users – are an excellent tool

7. Test, test and test again. Get as many as possible involved in the testing before it goes anywhere near the App stores

8. Think user experience (“UX”). Only.

9. You have to promote your app. The App Store won’t do it for you. Have a dedicated web page on your site, get influencers to use it and rate it.

10. Review the experience, and test your outcomes against your goals for the app.

Welcome to the brave new world of app development.