IMARKETING REPORT 05.14.02: The State of Adsales; Pay To Watch Ads?
>> is it just me, or does Eliot remind you of a young Rudy?

Good Morning Execs,

So sorry no REPORT last week.
The proverbial feces hit the fan.
Things are better. New day for
this REPORT is now Tuesdays.
Thanks for your feedback. The
logic is that it's the day after you've
made your calls, set your meetings,
and need info, and it's not too late
in the week that this doesn't get
relegated to some weekly wrap-up
or something to delete because the
week's wound down and you really
don't care about work that much
to read anything else. And if you sent
me email last Monday, and I didn't
reply, I probably didn't receive.
Sorry, please send again.

It's interesting how investors are
racing to sue brokerages these days,
claiming they were mislead after
loosing an estimated $4 trillion from
the bubble's burst. Even more in-
teresting is that they're suing now
that they're broke, rather than
earlier, when these same brokerages
where making them filthy rich.
Spitzer says the analysts should be
more objective. The analysts say
they can't if they want to get closer
to corp execs for insight into the com-
pany. Corp execs only want their
stock up, so exclude from meetings
analysts that are negative on them.
So, if you have negative and positive
analysts, how does an investor know
who to believe? And with a mind-num-
bing scenario like this, why is anyone
even getting sued? After all, isn't in-
vesting all about risks?

That's my riff. Enjoy the rest.

CONTENTS: >> coverage spanning 3 wks from May 1 through May 13
1. BRANDS&INSIGHTS: The State of Adsales
2. CONSUMERFOCUS: Should Consumers Pay to Watch Ads?
3. MEDIA&CONTENT: No Niche Offline? Dead! No Niche Online? No Prob.
4. MGMT&OPS: The 'Net's Not About Selling

>>>>> >>>>> >>>>> >>>>> >>>>>

1. BRANDS&INSIGHTS: The State of Adsales

"Web media (yes even the biggies) are
not equipped to handle the business of
selling advertising on the Web from an
operational standpoint. They say that
they have accepted sequential liability
but they have not executed a system to
process orders accordingly. They don't
have good internal systems for tracking
ad orders from agencies placing business
for multiple clients. They don't have good
follow-up systems to collect. And they
still don't have systems in place for dis-
crepancy resolution." It's no wonder
media buying agencies are so cynical
and apprehensive about doing business
with smaller-name-brand sites. And no
one ever got fired for buying adspace on
Yahoo, right?

BOTTOM LINE: These comments
were emailed to me by a media buying
agency president and although I was
shocked to read about how the industry
really is, I don't think I totally agree that
the system is so completely ineffective.
In his argument, this president points out
that if online publishers can spend "10's
of millions of dollars" on measurement
and analysis, they couldn't spring a couple
of thousand on accounting software. Duh,
right? All other media have their acts to-
gether, except for online, and this is what
makes working with them difficult. How-
ever, I'd like to point out three important
things: 1) online is brand-spankin' new
compared to other media. Our operations
are evolving as we learn to become
profitable, so comparing us to other
media makes no sense. But don't worry,
since online will overtake all other media
soon, we'll get there operationally sooner
than the other guys did; 2) the first priority
online wasn't to make sure you had a
nice time, but to make sure you had a
return on your investment. And that's
what we've done - developed the most
sophisticated technology to measure
the most sophisticated medium today;
3) regardless of how you feel about
dealing with us, your clients still want us,
so, shut up and be patient. If you could
wait decades for everyone else, you
can wait at least one for us.

Smith, David L. "The Hangover", Mediasmith Anvil, Volume 2, Issue 6, April 25, 2002

>>>>> >>>>> >>>>> >>>>> >>>>>

2. CONSUMERFOCUS: Should Consumers Pay to Watch Ads?

TV companies are going nuts! They
hate TiVo and RePlay and want us to
pay to watch commercials!! They even
want to invade our privacy by tagging
their programs to track our use of TiVo
and RePlay and even want to kill our
choices by not allowing us to play DVDs
in diff DVD players... what the hell is
going on?!

BOTTOM LINE: You can't blame cable
companies for feeling the way they do
when consumers have so much control
over how they interact with their content.
"the 'Big Four' broadcast networks spend
$18 billion per year on programming and
related costs and get a paltry 2% return
In fact, with a 2% return to invest on new
initiatives, and a model dependent on ad-
vertising, it's no wonder many TV websites
suck and don't offer viewers the ability to
interact with their content. I mean, have
you been to or Layout,
nav, content, and use of color all suck.
The sites suck b/c they want you to
watch all their crap on TV, including the
ads. Since working with broadcasters,
my agency has discovered that viewers
really enjoy having a place online dedi-
cated to their fave programming. Not
a fan site, but a corporate sponsored
site where they can download stuff,
buy show related merch, and even
chat with the cast. Yeah, this may
seem like common knowledge, but
then why do network execs continue
to offer crap online for their viewers?
Well, I propose that in order to resolve
the TiVo-problem, offer a more inter-
active experience online, then maybe
your viewers won't mind watching
commercials, b/c they will always have
some control over their experience with
your content via the internet. Let's hope
it's not too late.


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3. MEDIA&CONTENT: No Niche Offline? Dead! No Niche Online? No Prob.

Offline, you need to be in niche in order
to survive these days. From print to
broadcast, everyone knows that in order
to keep your numbers up, you've got to
focus on a specific group with relevant
content. These consumers are almost
fanatical about this content, even if it
only reaches 10,000 of them. Well, on-
line, this principle was forgotten and
portals popped up left and right to cap-
ture the most aud's possible. When
everyone but Yahoo failed, it was evident
that those same niche principles applied
online. But unlike offline, where a
media company like Yahoo may loose
numbers or have to shut down to a
nimbler, niche newcomer, Yahoo has
easily been able to re-purpose its
content into niche verticals. Although
I envision an internet with micro-niches
will emerge as the ideal consumer internet
broader niches is working for the bigger
sites just fine. This logic is even evident
when making an ad buy: "'The reality on
the Internet is that target audiences are
often fragmented across multiple sites,
thereby limiting the ability of one or just
a few sites to efficiently reach a greater
number of defined audience members,'
said Mainak Mazumdar, head of research
and product management for Media Metrix."

BOTTOM LINE: You don't have to
go too far to understand the critical
importance of niche content with the
consumer of the future. Just look at
the success of niche programming like
"the Osbournes" on MTV. This show is
about an aging heavy metal rocker's
every day life at home with his family.
And yet, it now commands $100K
per 30-sec ad unit due to its popularity.
Unfortunately, what this potentially
means online is that if a larger player
ever decided to get into your niche
online, chances are it would succeed,
due to the low cost of re-purposing.
Yahoo has proven it, AOL, MSN are
proving it, so how long before another
deep-pocketed company enters the
scene with an all-niche model to start
with the goal of capturing the 30%
of people online that these 3 don't al-
ready capture?

READ MORE:,,12_1059251,00.html

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4. MGMT&OPS: The 'Net's Not About Selling

EBay is crushing the competition and
now everyone is scared that their biz
model is broken since it is emulating
e-tailing too much with features that
allow bidders to shop immediately
rather than wait for their bid to clear.
But here's the problem with thinking
that eBay's model is broken. EBay isn't
e-tail, isn't auction, it's interaction.
Buyers & sellers find trust and a com-
mon reason for doing business with
each other via eBay, a community that
listens to their needs and offers them
the tools to be entreprenuers in the pro-
cess. Well, that's just for the average
joe. What eBay offers large corporate
customers is also choice. Things they
need at the prices they want them for.
No other e-tailer can offer this since
they have to sell their products at prices
that must be above fixed costs like manu-
facturing, transportation, storage, rent, etc.

BOTTOM LINE: When you stop trying
to sell online and just start interacting
with your visitors, then you'll understand
that your visitors are human with a
natural urge to trade. Who they trade with
and how they trade is where you MUST
offer them unprecedented choice, b/c this
builds loyalty. And when you have loyalty,
your consumers won't mind if you charge
them for offering them so many choices.
Think I'm full of baloney? Think about
the success of the Mall when they first
sprang up in the 60s & 70s. Customers
still don't mind paying the costs of getting
there & parking. Do you need your weekly
dose of "Queer As Folk"? Well, it's niche
and probably relevant to your lifestyle so
you gladly fork over subscription fees to
Showtime to watch it. And that's all it
takes to make money online - offer your
visitors choices on how to interact with
your brand and once you do that, you'll
have developed loyalty. When you have
loyalty, you can charge them. If you're
starting out by charging them for every-
thing, with very little choices, and no way
to interact with your brand, you're already
doomed to fail.


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Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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