Marketing spend in New Media

New media is the new virgin territory for marketers. The current structure of the space has New Media providers with a very close link to their audience. This makes it a great area for competent marketers to reach targetted audiences. The current players in "old media" used to be in the same position. Over time, growth and consolidation, their reach has grown at the expense of audience connection and precision, decreasing their utility for targetted marketting campaigns. Is there some intrinsic quality to new media forms that will maintain their audience connection or is that connection just a consequence of their youth?

I was reading on ebusinessnews about Internet marketing reaching record highs. Unfortunatly the research is only available to me through a 220 pound subscription (on nma.co.uk), but there are many other sources and articles that agree (here for example). What is not clear to me is how much of the growth in Internet marketing is good marketing spend, and how much is bad. This statement obviously necesitates a description of the difference.

As with most things marketing can be used for both good and evil. Good marketing can basically be summarised to 'give the customer what they want' and bad to 'get them to buy what we have'. In the world there are millions of companies and billions of consumers. It is difficult for an individual company and another company or consumer that would have clear benefit from engaging in commerce to find each other. 'Good' marketers are interested in information sharing. They want customers that would benefit from their products to know about them, and they want their company to know what improvements would be meaningful to customers. 'Bad' marketers are looking at how they can convince more people to buy their product regardless of what their need is. It is a sometimes subtle (often not) difference in focus between customer and internal needs/desires. This difference drives noticeable corelated differences in activities and style.

The connection new media has to its audience is the reason why marketers are getting more interested in the medium. I questioned at the start whether this connection was solely due to the youth of the segment. As with most new industries, there are a lot of new, small entrants focusing on specific segments (or in some cases interest areas). What typically happens is that as that segment grows in popularity and stability some of these entrants fade away and some grow. Once the organic growth slows, consolidation happens as competition and mergers weed out the smaller players. Eventually (as we can see so well in radio) the landscape gets dominated by large players who unavoidably lose a lot of their connection to the audience/customer on the micro level. The product becomes homogenous to appeal to the widest possible audience. This is generally good for shareholders and the CPM style advertiser, but for media, not so good for the savvy marketer looking for a communication path to their specific target segment.

There are two reasons why I think this is not necessarily the fate for new media. Firstly the technology base of most new media forms allow for a company to be both large and focussed at the same time. One example is Weblogs Inc where one company controls many focused blogs. Advertising can be managed centrally, but advertisers can select the avenues that have the right audience for them. Other examples are the Twit network, the Blubrry podcast network or Revision 3 which host multiple speciality shows under the one banner brand. There is still a risk of homogenisation as these companies grow; addressing smaller markets become harder to justify the larger the empire they are a percentage of. As long as growth is managed however, there is no intrinsic reason why the focus cannot be maintained even post merger or takeover.

The second buffer is the architecture of social networking from which new media was born. All of the new media forms are tightly coupled by their delivery method to feedback from their audience, and in fact owe much of their existence to that feedback. This allows new media to inherently understand more about its audience than any preceding form of media. This is extended by the delivery method being extremely measurable. While a radio station relies on extrapolation of surveys from a small (generally unrepresentative) portion of the possible audience to get its listener numbers, a podcaster can tell exactly how many people downloaded each show. Savvy new media players are extending this connection by getting to know their audience better. Last month in episode 270 (I think) of the GNC podcast Todd was talking about the results of his annual user survey (and CPM advertising being crap). Now this is a new media player that really gets it. By understanding his audience better he is better able to communicate his value to potential advertisers, and good marketers can know whether his audience would have any interest in their product.

So the base, to me, looks very good for new media marketing. This is not to say new media will be immune from bad marketing, but its potential for use to good marketers has a decent chance of enduring for some time. The devil is in the details as always, and even with the architechtural benefits there are still mistakes that can limit the effectiveness of new meda marketing. The worst fault I have seen so far is treating new media like old media. The nature of the media should be matched when selecting how to communicate a message. I will use some examples of video casts to illustrate this point using two that I personally enjoy Cranky Geeks and Diggnation. Both of these are funded (partly) by ads but both present them differently.

Cranky Geeks follows the traditional tv model and pauses for pre recorded ads. To me this has the same impact as ads on tv, I ignore or skip them. Diggnation works their sponsor announcements into their copy, they talk about them in their own words and offer personal opinions and sometimes jokes. The result is that I usually watch them as they are as entertaining as the show. Another result is I have no idea who sponsors Cranky Geeks but could name at least 3 companies that have sponsored at least 1 episode of Dignnation (just to prove it GoDaddy, Cachefly and winelibrary). The other factor to this is the endorsement over advertising dynamic. I listen/watch a particular new media because I share something in common with the host(s), which is at least an interest in a similar topic. The focussed nature of the medium means this will be the case for most of the audience. I can then trust that if the host of the show has used and liked a particular product then there is a better than average chance I might. A good marketer with a good product then has a venue to get a good message out to solid potential customers. These customers will be grateful for the information on how to get a product that solves a problem/fills a need they have. If Kevin and Alex just mention a sponsor, that company has likely not researched their product/customer segment mix well enough and are just trying to flog something. If the boys have a 5 minute discussion about how much they liked the product then I can tell it was probably well placed.

As in most media, there is room for bad marketing practices to flourish in new media. The architecture of new media gives it an advantage in the long run for good marketing practices with far superior connection to its audience and the ability to grow but retain a focus on niche topics. The dangers to this are treating the new media like old media, particularly as old media tries to enter the arena, and forgetting or ignoring the basis on which new media's sucess will stem from.