Entries categorized "Advertising Trends"

July 03, 2009

The price of freedom: Reinventing the online economy (RSA Journal July 2009)

Logo-rsa I was delighted to be invited to make a contribution to the RSA Journal's July 2009 edition, the printed version of which was just send out I believe, and the online edition that just went up on their website.

The complete title of my piece is: "The price of freedom - reinventing the online economy: Gerd Leonhard explains why ‘free’ content can still pay in the long term" and I really enjoyed writing this for them.

Following my last presentation at the RSA, in April 2009, on 'The Future of Content and Creativity' I have had many good conversations about this topic. The audio track from this event is here, btw; and the video is embedded again, below. Enjoy. And RT;)

I definitely recommend that you check out the other great features in the Juy 09 RSA journal, as well, there's some great gems in there.

You can read the entire thing on the RSA page, so here is just an excerpt:

Free iStock Photo freemium "Free information, free music, free content and free media have been the promises of the internet (r)evolution since the humble beginnings of the World Wide Web and the Netscape IPO on 9 August 1995. What started out as the cumbersome sharing of simple text, grainy images and seriously compressed MP3s via online bulletin boards has now spread out to every single segment of the content industry – and even into ‘meatspace’ (real-life) services such as car rentals. Without a doubt, ‘free’ has become the default expectation of the young web-empowered digital natives and now the older generations are jumping in, too.

On top of the already disruptive force of the good old computer-based Web1.0, we are witnessing a global shift to mobile internet – a WWW that is, finally, so easy to use that even my grandmother can do it. While five years ago, we needed a ‘real’ computer tethered to a bunch of wires to port ourselves to this other place called ‘online’ and partake in global content swapping, now we just need a simple smart phone and a basic data connection. With a single click of a button, we’re in business – or rather, in freeloading mode. 

As users, we love ‘free’; as creators, many of us have come to hate the very thought. When access is de facto ownership, how can we still sell copies of our creations? Will we be stuck playing gigs while our music circles the globe on social networks, or blogging (now: tweeting) our heart out without even a hint of real money coming our way?

Daunting as it may seem, we can no longer stick with the pillars of Content1.0, such as the so-called fixed mechanical rate that US music publishers are currently getting ‘per copy’ of a song ($0.091). Nobody knows what really defines a copy any longer when the web’s equivalent of a copy (the on-demand play of that song on digital networks) may be occurring hundreds of millions of times per day. No advertiser, no ISP and not even Google has this kind of money to pay the composer (or rather, the publisher), at least not until the advertisers start bringing at least 30–50 per cent of their global US$1 trillion marketing and advertising budgets to the table.

Price of freedomTraditional expectations and pre-internet licensing agreements are exactly what are holding up YouTube’s deals with the music rights organisations such as PRS and GEMA: this is what the rights organisations used to get paid for the music that is being copied, and this is what they want to get paid now. This impasse is causing significant friction in our media industries worldwide. Yet, below the top-line issue of money, there lurks an even more significant paradigm shift: the excruciating switch from a centralised system of domination and control to a new ecosystem based on open and collaborative models. This is the shift from monopolies and cartels to interconnected platforms where partnership and revenue sharing are standard procedures. In most countries, copyright law gives creators complete and unfettered control to say yes or no to the use of their work. Rights-holders have been able to rule the ecosystem and, accordingly, ‘my way or the highway’ has been the quintessential operating paradigm of most large content companies for the past 50 years.

Enter the internet: now the highway has become the road of choice for 95 per cent of the population, the attitude of increasing the price by playing hard to get is rendered utterly fruitless. Like it or not, a refusal to give permission for our content to be legally used because we just don’t like the terms (or the entity asking for a licence) will just be treated as ‘damage’ on the digital networks, and the traffic will simply route around it. The internet and its millions of clever ‘prosumers’, inventors and armies of collaborators will find a way to use our creations, anyway. Yes, we can sue Napster, Kazaa or The PirateBay and we can whack ever more moles as we go along. We can pay hundreds of millions of dollars to our lawyers and industry lobbyists – but none of this will help us to monetise what we create. The solution is not a clever legal move, and it’s not a technical trick (witness the disastrous use and now total demise of Digital Rights Management in digital music). The solution is in the creation of new business models and the adoption of a new economic logic that works for everyone; a logic that is based on collaboration, on co-engagement and on, dare we mention it, mutual trust – an ecosystem not an egosystem. Once we accept this, we can start to discover the tremendous possibilities that a networked content economy can bring to us.  

Free, feels-like-free and freemium

Much has been written on the persistent trend towards free content on the net. It is crucial that we distinguish between the different terms so that we can develop new revenue models around all of them. ‘Free’ means nobody gets paid in hard currency – content is given away in return for other considerations, such as a larger audience, viral marketing velocity or increased word of mouth (or mouse). I may be receiving payment in the form of attention, but that isn’t going to be very useful when it’s time to pay my rent or buy dinner for my kids. Free is... well, unpaid, in real-life terms.

 ‘Feels-like-free’, on the other hand, means that real money is being generated for the creators while their content is being consumed – but the user considers it free. The payment may be made (ie sponsored or facilitated) by a third party (such as Google’s recently launched free music offering in China, Top100.cn); it may be bundled (such as in Nokia’s innovative ‘Comes With Music’ offering, which bundles the music fee into the actual handsets) or the payment may be part of an existing social, technological or cultural infrastructure (such as cable TV or European broadcast licence fees) and therefore absorbed without much further thought. Feels-like-free could therefore be understood as a smart way to re-package what people will pay for, so that the pain of parting with their money is removed or somewhat lessened – everyone pays, somehow, but the consumption itself feels like a good deal...."     Read on.  PDF: Download RSA - The price of freedom Gerd Leonhard July 2009

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June 26, 2009

Twitterfountain: the coolest Twitter widget yet

Thanks to Arjan at FreedomLab in Amsterdam I disvovered the coolest Twitter widget today: Twitterfountain.This widget allows you to animate the latest tweets on any keyword, user or hashtag, and overlay them on top of Flickr images based on any other keyword or tag. You can adjust the settings (size, speed etc) as you see fit.  Very cool indeed. Mashup heaven. Note: you may have to give it a few minutes to get cooking (right below!)... Want more?

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June 21, 2009

The Future of Advertising: become like... Content

When ads become so targeted, personalized, contextual, location-based, meaningful and relevant that I will want to see them (or at least not try to avoid them), then we are getting somewhere. I think that "Advertising IS Content" will be the key to web-native (and therefore mobile-native) advertising and marketing - all else will fall short of getting great results.  I wrote about this in June 2008, here, and in yesterday's presentation at CMMA 2009 (the future of mobile marketing).

Some nice examples that are heading in this direction are the BMWZ4 Paint by Powerslide iphone application (a great example for branded apps), Jeep's 'have fun out there' campaign, and Apple's 'second opinion' commercial on the NYT website (thanks to Frank at MediaArts in LA, btw). What we really need is cutting-edge creative work that is based on a complete and real-time understanding of how people are starting to mix real-life experiences, the web, mobile and social media.

Advertising IS content

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June 18, 2009

Mobile Marketing Futures: Data is the new Oil (my presentation at CMMA 09 in Singapore)

Picture 20 Thanks to a recent Twitter conversation (with @copysense) I was inspired to make a lot of use of a newly found tag line "Data is the New Oil" during my presentation at the Mobile Marketing session at CommunicAsia 2009. You can download the PDF CMMA Mobile Marketing Futures Gerd Leonhard Public (15MB PDF).  Apart from data, trust and oil, this is what I talked about: 

Picture 19 The State of the Mobile Marketing Industry and beyond: Consumer generated content, social networking, online on-demand video, engagement and the death of television as we know it - The velocity of change only seems to be increasing. Zenith Optimedia estimates online advertising spending will grow 8.6% in 2009, reaching $54.3 billion by the end of the year, even as the overall market slumps by 6.9%, as marketers increasingly leverage digital media and technology platforms to establish a dialog with their customers,    optimize messaging and delivery and, ultimately, drive brand preference. How will the looming recession impact on media and advertising? Will digital media suffer along with other platforms or might our industry benefit from these tough times as marketers shift a disproportionate amount of spending to performance-based marketing channels?

Picture 21

June 16, 2009

Advertising will get a lot smarter - and support a lot of free content

While we pay attention to great, personalized, contextual and relevant content, brands want to reach us via that content, and via the CONVERSATION, the social context, around that content. This opportunity will drastically expand due to the explosive rise of the mobile Internet and the advent of ubiquitous smart phones, globally, but the quickest opportunities will be in Asia, no doubt (where many local cultures are already build around a much more mobile and always-on lifestyle than in Europe or the US). Content will be offered 'for free' in return for paying attention to brands, advertisers and sponsors, primarily via mobile applications (branded or in-app advertised) as well as via the browser. Stay tuned via www.twitter.com/gleonhard or Facebook

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June 13, 2009

Mobility and the Future of Advertising and Marketing (short video)

In preparation for for my keynotes and presentations at CommunicAsia in Singapore (June 18/19), here's a short video clip on how the mobile Internet is changing Marketing and Advertising. Enjoy. RT. Share. Embed. Download the 32 MB .mov file: Download Advertising Marketing 2.0 Gerd leonhard Futurist

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June 07, 2009

Marketing IS the Product IS the Marketing (short clip with Jason Kilar / HULU)

Social Media Futures: Marketing 2.0Image by gleonhard via Flickr

The 3-minute daily AdAge video shows always provide some interesting morsels. In this short excerpt, below, Jason Kilar (Hulu's CEO) says: "We don't have a marketing department because if our product isn't going to sell itself on its own merits we've got bigger problems".  This is very much how I look at the role of Marketing, going forward, as well. My 4 cents on this topic:

  • Design the marketing right into your product or service, from the get-go - if people will not want to share what you are offering, that's where you need to start!
  • Instead of paying to grab people's attention (which usually means disrupting them, several times), invest in your product to be so attractive, or better yet, addictive, that your users will promote it for you. Word of MOUTH and word of MOUSE is what will drive your success more than anything else, so that's where every cent is well spend
  • Once a good many people are using your product or service, enable and encourage them to share all that goodness with their friends and peers (great examples for that include Nike+ and the recent T-Mobile Life's for Sharing campaign); put 'share this' and 'tell your friends' links and widgets everywhere, and integrate things like Facebook Connect, Google Connect and Twitter.
  • The best way to activate your users as voluntary brand-messengers is to allow them to co-create, to engage, to get involved - and of course, to talk to them, to build relationships. This is the key to Twitter's rapid growth.


 

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May 19, 2009

Sponsored Conversations - yes, no, maybe?

Techdirt sponsored conversations I have run across the sponsored conversations concept via Josh Bernoff and via Techdirt's Mike Masnick before (see Techdirt's sponsored conversation example here), and found it very interesting yet a little hard to align with a more 'seriously independent' blogging approach. I am not sure that I would personally want to engage in having my blog or my tweets sponsored by someone that wants to reach my readers or 'followers' (and yes... there have been offers), but I still like the concept and will investigate it further.  It seems like there is a nice package to be made with good old Word of Mouth, web-native Word of Mouse, and Sponsored Conversation - or what do you think?

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April 23, 2009

Nice CNN video on Google's Free Music Offering China

I blogged on this crucial development here; and just found this video to share.

April 17, 2009

Cool Sprint 3G network commercial with some interesting statistics (video)

Write text here...

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April 15, 2009

Futurists Glen Hiemstra and Gerd Leonhard on Behavorial Targeting, the Future of Advertising and Google (video)

advertising 2.0 gerd leonhard futuristImage by gleonhard via Flickr

This is from our new series called "Where is it Going (WiiG)":  Futurist Glen Hiemstra and Gerd Leonhard talk about Behavioral Targeting, privacy, the future of advertising and Google's recent announcements in this context.  Subscribe to WiiG via iTunes (download all videos as soon as they go up).

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April 07, 2009

8 key trends and some foresights for the next 5 years

Every now and then I get tempted into actually formulating some fore-sights. This time, the preparations for my upcoming speech on "New Media Futures" at the RSA in London have egged me on to share a few key points with you:

Connected world mobile network IS devices Netbook 1) We will soon see the emergence of many different kinds of iPhone-influenced Netbook-like devices; some will be Apple-made but most will not. These devices may be 2-3 times the size of an iPhone and will connect to the Internet in every conceivable way, i.e. 3G/4G, LTE, Wimax, Wifi etc.  They will be touchscreen, zoom-interface enabled, cloud-computing, speech-controlled, location-aware, mobile-money equipped, socially hyper-networked, always-everywhere-on, HD-camera equipped and possibly project images and audio or even support basic holography.

In addition to the high-end, fully-loaded and perhaps still rather expensive versions that many of us in the so-called developed countries will gobble up, low cost and more basic editions for the developing markets will be sold in the 100s of millions (think India, China, Indonesia...). These smart gadgets will have very low energy consumption and therefore extremely long battery life, may even sport basic solar-power options, and may ultimately cost less than 30 USD, or even be 'free' (why bother to sell the box if you can make a lot more $ with selling services.... Nokia?).

It is these mass-market yet very smart and networked devices, together with cheap or free wireless broadband that will really revolutionize reading, newspapers, books and education; not to mention our music, TV and film consumption habits. Content commerce will be completely redefined as a consequence. As BTO told us a loooong time ago: "You ain't seen nothin' yet"

Connectivity plus filter gerd 2) Very cheap or free wireless broadband - at fairly high speeds, i.e. at least 2MB / sec - will be available in most places, particularly in the booming new economies of Asia, India, Russia and South-America, and a bit later, in Africa. Funded by the likes of Google and by the future 'telemedia' conglomerates, governments, cities and states, wireless broadband will probably reach 3-4 out of 5 people on the globe within 5-8 years. User-generated & derived content (UGDC for those of you that must have an acronym ;), virtual co-production, mobile editing and instant network sharing will explode by a factor of 1000, making control of distribution a very distant concept of the past. UGC or UGDC may make up to 50% of the global content consumption by 2015. Consumers will be (co)-creators, marketers, sellers and buyers, and come in a hundred variations, from totally passive to totally active. Then, indeed, filtering, culling and curation will be the key to success.

License the network money in 3) Collective blanket licenses that legalize and unlock legitimate access to basic content services via any digital network will emerge, and are likely to take over as the primary way of content consumption, around the world (but in Asia, first). Just like water or electricity which is readily available when moving into a new home, the basic access to content will be bundled into access to digital networks, i.e. via ISPs, operators, telecoms, portals etc. This shift is starting with music (as already done by TDC in Denmark, and Google in China), and will be quickly followed by films, TV, books and newspapers. Access may often - but in local variations - 'feel like free' to the user but will in fact generate 10s of Billions of $$ via blanket licensing fees (yes... those pools of money), next-generation advertising and branding, data-mining & sharing, up-selling, re-packaging and many other new generatives. This topic will, btw, be the gist of my RSA presentation tomorrow - if you can't be there in person, you may want to listen to the live audio, via this link.

I think that governments around the world will call for and / or support the implementation of collective content licenses that wil finally legalize content usage on the Internet, similar to how governments pushed for the radio and broadcasting licenses  approx. 100 years ago. Whether these blanket licenses will be voluntary or compulsory remains to be seen - in any case the only alternative is to perpetuate a severely dysfunctional telemedia ecosystem that criminalizes almost all users and stifles innovation while generating virtually zero new revenues for the creators.

4) Fuel-cells and other next-generation mobile energy sources are a certainty. A serious increase in mobile device power (and therefore, its use) will be achieved by employing next-generation technologies such as fuel cells that could provide for up to 500x the usage time that we have today. This is likely to become a reality in 3-5 years and will revolutionize how we use - and how much we rely on - our mobile devices, especially in countries where there the fixed-line power infrastructure is much less developed or non-existent.

Advertising future 2.0 gerd leonhard futurist 5) Completely targeted and personalized advertising, delivered largely on totally customized mobile computing & communication devices, will turn the the $ 1 Trillion USD advertising and marketing services economy upside down. Behavioral targeting and user-controlled advertising will, of course, become an even hotter potato and a much discussed challenge, but the good old deal of 'I give you attention & personal data and you give me value e.g. content' will be even more pronounced on the Net. In fact, advertising as we knew it is already more or less outmoded and will, during the next 2-3 years, be completely reinvented. Privacy and Trust are the #1 issues here.

The implication is that if your data (within your specific sets of permissions and opt-ins)  is used to bring you perfectly synchronized advertising, than advertising really becomes more like content, too. Watch this play out in the mobile advertising space, starting this year, and quite possible boost the global value of advertising-content by more than 100% by 2015. Google will be the main driver here, plus Facebook, Nokia and yes... Twitter (soon to be = Google).

Value trends gerd leonhard 6) We will witness the more or less complete decline of most forms of physical media within 7-10 years. The very definition - and thus the core economic business models - of newspapers, magazines, CDs, DVDs and books will be completely re-written, and new forms of content packaging will rapidly emerge. We can already see a preview of how this may work in the current mobile applications boom: content as part of software packages; paying for the packaging, the curation, the bundling, the personalization - not just for the zeros and ones that are 'the copy'. This trend is important not just because it will reflect the users' (or better... followers') new consumption habits but also because because of the increasing need to save energy and material costs - and moving from content products to content services will certainly go a long way in this regard. The total decline of printing in people's homes, and for personal use, will commence, as well.

Privacy keyhole peek IS 7) Paying for privacy will become a distinct option. Today we pay to go online and connect; in the future we may end up paying for the luxury to go offline, disconnect, enjoy the quiet, and give our brain some rest. Maybe if we don't want to share our click-trails and usage data, we will be able to make cash payments instead - and the more you pay, the more private you can be..?

8) Travel 2.0: alternatives to 'actually going there' will explode: immersive, 3D video, virtual rooms, holography. This is a key development that will nurture new forms of entrepreneurship, education and group working.

Please talk back!

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March 27, 2009

The Future of ICT / TIME: my presentation at the NSN Transformation Forum in Cologne

Picture 47  I had the great pleasure to speak at Nokia Siemens Networks' Transformation Forum in Cologne yesterday (March 26, 2009). I really enjoyed the event and had lots of great conversations; and some Koelsch, too!  Rolf Hansen, CEO of SIMYO, was there as well, and delivered a very interesting presentation on 10 imperatives of success, which miraculously synced very nicely with own speech.

As promised, here is the PDF (creative commons-non-commercial + attribution licensed, as usual): NSN Innovation Forum 2009 Cologne Gerd Leonhard Futurist PDF 16MB

My topics included:

  • The consequences of what I call 'Broadband Culture'
  • Why and how digital content, UGC and Social Media are the biggest growth factors for the ICT industries, going forward
  • Why telecoms and ICT companies need to get involved with Content, and move up the foodchain
  • Why content flat-rates, starting with music, are the way forward, and need to be regulated
  • The copy economy vs the access / usage / sharing economy

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March 17, 2009

The End of Control and the Future of Content: new Video of my Authors@Google Talk in San Francisco

The Google guys have just published a video with my talk at Authors@Google, in San Francisco, March 2, 2009 (see the details here Pdf: The End of Control Gerd Leonhard at Google SF PDF *22MB). Due to some technical issues my fancy slides (i.e. the stuff on the screen) come across very nicely in this video while I am left a bit 'in the dark' - but if you use the HQ version on the Youtube site you can still get a much better idea of what my face actually looks like (I guess always wearing black is not ideal when the lights are bad;).  Anyway, I do think this is one of my best talks, so... watch the entire 55 Mins 22 Secs.  As far as the End of Control Book is concerned, I will have an announcement on my plans within the next 10 days...stay tuned.

Eoc-logo-synchro Here is the official Google Talks description: The End of Control & The Future of Content:  The tough issue of control emerges, again and again, as the key contention point within TV companies, publishers, record labels, and broadcasters: How can a commercial venture that is based on so-called intellectual property thrive and prosper in an environment that seems to continuously and progressively remove control from the creators/owners/providers of content, and hands it over to the people formerly known as consumers (aka the users), effectively making them more powerful every single day?  But the reality is that every click inadvertently makes another case for the consumers ever-increasing rise in importance. Within all the conversations I have had about things like commercial content versus shared content, about the read-only or the read-write web, and about copyright versus Fair Use, the crucial question always seems to boil down to WHERE IS THE CONTROL HERE, i.e., questions such as Who will control this new media universe and How much control do I need to run a revenue-generating business?

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March 06, 2009

Band offers mobile app for streaming music (Ars Technica): Music as Software is the next format after the CD!

Read about the Presidents of the United States of America: Bands bypass iTunes by streaming music through iPhone apps - Ars Technica:  "If you're a Presidents of the United States of America fan, you can now listen to the band's entire discography for a mere $3, but not through the iTunes Store. Fire up your iPhone Picture 23and grab it from the App Store instead; the band has bypassed the record label bureaucracy and released everything on its own..."

This is clearly a very cool idea, and something I have been looking at for quite some time: in the dawning age of rapidly exploding mobile app stores, on 5+ platforms, and with something like 2 Billion always-on smart phone users, we can now start selling music as software packages, i.e. in any UI/UX, multimedia, online/offline format that fits the artists' specific users and locations. Bands and artists, their managers, agents or labels and even publishers can select any combination of audio, video, pictures, texts, news feeds, games, twitter updates and social media 'rivers' to update the bands fans at any time, anywhere in the world.

My hunch is that most artists will probably have basic free versions available, at first, followed by premium apps that offer considerably more value and will cost from a few extra dollars all the way up to even $50 per user - and most importantly, lots of up-selling will be fueled through these apps. Think live concerts webcasts and downloads, premium video footage, remote backstage access, preferred access at concerts, merchandising etc - once I am hooked on the band, using this app, I make the perfect case for pitching something else to me.

 I have said this a few 1000 times in the past, but here it is again: Music as a service (i.e. get / buy / bundle access first, and only then buy products), and now, Music as mobile software packages may well be the next format after the CD. 

Take it a step further and think of how advertisers, brands and other partners could (and will) sponsor or co-present these apps, and therefore align with artists that make a good match with their branding strategy (see Groove Armada & Bacardi, Sting & Jaguar), and pretty soon most mobile music apps will be free or as I like to say, Feels like Free, for the users. Of course, downloading i.e. the ability to keep music must be part of it, as well - especially in the developing countries where easily available wifi/wlan is not that far along quite yet. I would expect that this will be part of many premium mobile music apps very soon. Stay tuned - this is a major trend, for sure.

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Music2.0 - The Book!

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