Plus ça change

As the irresistible machine of competitive pressures trundles on, it is no surprise that retailers are scrambling to shore up the weaknesses that they perceive in their rearguard action against the rise of the e-tailer, no matter how suspect the financial metrics of the new measures, be they same-day delivery, the ever-advancing Christmas sale season or technology-augmented shopping.

It is also no surprise that as the mobile platform is increasing eating into the media consumption mix, both marketers and media platforms are grappling with its baffling economics, even as they well be on the way to cooking their own golden goose.

The emperor of social media and his new clothes

As AdAge is finally pointing out what should have been blindingly obvious, No amount of "Liking" or "Friending" means a thing for a brand unless it ultimately translates into actual sales. New media, much like the old, is a channel for communicating a message.

If the message is not seen, ignored or lost in the clutter then all the efforts at "engagement" are no more useful than the proverbial other half of advertising.

A collision of Silicon Valley and TV

Dave Morgan of Ad Age ably glosses the reasons why the tech giants such as Googe, eBay and Microsoft have failed to disrupt the TV ad market they they have disrupted the rest of old media. His conclusion is that, fundamentally, the TV ad market does not want to be disrupted, and, by the way, business is still done there by people and not interfaces.

What Morgan says is largely true, but it was also true for newspapers, magazines and direct mail -- right up until the moment when their viability expired. TV has resisted longer, for reasons that I suspect have more to do with the power of the broadcasters than the ad community, but it will not hold out forever. Media consumption over television and the Internet have been converging, first slowly, but ever more persistently, and the day is not long off when the TV will be just one more device for aggregating media, alongside the tablet, phone, and, for all we know, the kitchen window. TV advertising will not long survive the consequent demise of broadcasting, so the abandoned efforts of the likes of Google are simply price paid for learning more about the next media frontier. Tighten your seat belts, folks, until then this will be a bumpy ride.

The ecstasy and the agony of Twitter

Now that the drama of the election is over, at least one thing has been made abundantly clear: Twitter has once again demonstrated its immense value as a promotional vehicle.

The reason for Twitter’s dominance, it seems to me, is its fundamental design, where all content delivered to a subscriber always comes because the subscriber has explicitly opted in to receive it – wither directly from the source or by way of a trusted intermediary. This is where the secret to Twitter’s success in driving consumer behavior really lies and this is the reason that it will always outperform its online competition.

However, it seems that Twitter’s recent moves toward monetization are threatening the very nature of its value-add. First, it burned developers who have done a great deal to help Twitter gain acceptance and made it usable for volume communications. More recently, Twitter began inserting ads into the tweet-stream, which goes directly to undermining the relationship of the subscriber to the information source. The subscriber no longer receives only the information that he or she has opted in to read, but is now bombarded with what amounts to, not to put a finer point to it, spam. Spam, as we all know, is uninvited and unwelcome messaging. There is a largish cottage industry that grew up around defeating spam for email, but Twitter is a walled garden and it will make sure that spam from its advertisers always gets through.

Now, this is not to say that Twitter does not need to monetize its offering, quite the contrary. Without a viable monetization strategy, the company is just as likely to go the way of Netscape (remember them?) as the more recent New Media failures. Still, forcing a steady diet of spam down the throats of its subscribers is rather more likely than not to create an opening for a new entrant poised to eat Twitter’s lunch, because there are few things that people hate as much as they do spam. There are some rather obvious monetization strategies that Twitter does not seem to have pursued in its quest for financial viability. For the sake of its shareholders, not less than for the sake of its advertisers, I hope that Twitter figures out that killing the goose sooner or later will put an end to golden-egg flow.

(Wired article link hat tip: Abnormal Returns)